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UBER to Acquire Alcohol Delivery Startup Drizly, Shares Pop
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Uber Technologies, Inc. (UBER - Free Report) has entered into a deal to acquire alcohol delivery startup Drizly Inc. for $1.1 billion. Following this news, shares of Uber closed yesterday’s trading session 7% higher.
Drizly operates across more than 1,400 cities in the United States. Upon completion of the acquisition in the first half of 2021, Drizly’s marketplace will be integrated with the Uber Eats app. A separate Drizly app will also be available. The purchase predominantly consists of Uber shares, with less than 10% in cash.
With coronavirus confining people to their homes, Uber’s core ride-hailing business has taken a back seat. Evidently, gross bookings and revenues from the company’s Mobility (formerly Rides) segment dropped 53% each in the third quarter of 2020 from the year-ago period. Amid this downturn, Uber’s delivery business helped the company stay afloat. Delivery revenues are seeing a surge with online order volumes from homebound customers rising. In the third quarter, majority (46.4%) of the company’s revenues came from Delivery. Revenues from this segment skyrocketed more than 100% year over year to $1,451 million. In order to take advantage of this boom, Uber has been trying to expand its delivery operations. To this end, it acquired food delivery company Postmates in December 2020 for $2.65 billion.
Moreover, in the past couple of months, Uber has been looking to shed its unprofitable side businesses and focus on its core ride-hailing and delivery platforms as it aims to become profitable in 2021. The company will be selling its flying taxi unit, Uber Elevate, to Joby Aviation. As part of the acquisition deal, Uber will invest $75 million in Joby. In a similar deal with Aurora Innovation, the company will sell its self-driving unit Advanced Technologies Group or ATG. Uber will invest $400 million in Aurora to get a 26% stake in the company. Both these transactions are expected to close in the first quarter of 2021, subject to customary closing conditions.
Shares of Baidu, Shopify and Facebook have gained more than 90%, 100% and 27% in a year’s time, respectively.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early. See the 5 high-tech stocks now>>
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UBER to Acquire Alcohol Delivery Startup Drizly, Shares Pop
Uber Technologies, Inc. (UBER - Free Report) has entered into a deal to acquire alcohol delivery startup Drizly Inc. for $1.1 billion. Following this news, shares of Uber closed yesterday’s trading session 7% higher.
Drizly operates across more than 1,400 cities in the United States. Upon completion of the acquisition in the first half of 2021, Drizly’s marketplace will be integrated with the Uber Eats app. A separate Drizly app will also be available. The purchase predominantly consists of Uber shares, with less than 10% in cash.
With coronavirus confining people to their homes, Uber’s core ride-hailing business has taken a back seat. Evidently, gross bookings and revenues from the company’s Mobility (formerly Rides) segment dropped 53% each in the third quarter of 2020 from the year-ago period. Amid this downturn, Uber’s delivery business helped the company stay afloat. Delivery revenues are seeing a surge with online order volumes from homebound customers rising. In the third quarter, majority (46.4%) of the company’s revenues came from Delivery. Revenues from this segment skyrocketed more than 100% year over year to $1,451 million. In order to take advantage of this boom, Uber has been trying to expand its delivery operations. To this end, it acquired food delivery company Postmates in December 2020 for $2.65 billion.
Uber Technologies, Inc. Price
Uber Technologies, Inc. price | Uber Technologies, Inc. Quote
Moreover, in the past couple of months, Uber has been looking to shed its unprofitable side businesses and focus on its core ride-hailing and delivery platforms as it aims to become profitable in 2021. The company will be selling its flying taxi unit, Uber Elevate, to Joby Aviation. As part of the acquisition deal, Uber will invest $75 million in Joby. In a similar deal with Aurora Innovation, the company will sell its self-driving unit Advanced Technologies Group or ATG. Uber will invest $400 million in Aurora to get a 26% stake in the company. Both these transactions are expected to close in the first quarter of 2021, subject to customary closing conditions.
Zacks Rank & Key Picks
Uber carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Internet - Services space are Baidu, Inc. (BIDU - Free Report) , Shopify Inc. (SHOP - Free Report) and Facebook, Inc. . While Baidu and Shopify sport a Zacks Rank #1 (Strong Buy), Facebook carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Baidu, Shopify and Facebook have gained more than 90%, 100% and 27% in a year’s time, respectively.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>