Uber Stock IPO: These So-Called Alternative Metrics

You know what is the sign of a great management team? An unrelenting focus on earnings per share. If you look at the annual reports of Nike, Dollar General, Home Depot, and Autozone stocks over the past twenty years, you will see regular inclusion of “per share data” along with the management team’s description that this is the metric by which wealth for the investors is created over time.

When a company is not satisfactorily growing profits on a per share basis, it will often create some alternative metric that it will convince current and prospective shareholders that it should care about as an alternative to growth in profits per share.

Right now, Uber is telling the investor community that it should focus on “core platform contribution profit” rather than profits per share because Uber claims it is earning $941 million in this core platform contribution profit, or $0.56 per … Read the rest of this article!