Uber Technologies’ (UBER - Free Report) co-founder and former CEO Travis Kalanick will cease all connections with the company by this year-end, having already sold his entire stake worth approximately $3 billion. Effective Dec 31, he will step down from Uber’s board.
Kalanick is said to be departing from Uber to “focus on his new business and philanthropic endeavors.” He is currently focusing on his new venture CloudKitchens, a start-up providing smart kitchens for delivery-only restaurants.
When Uber’s ex-CEO began selling his shares at an enormous rate following the company’s lock-up expiration on Nov 6, many experts believed that the move was aimed at generating funds for his new business initiative. Co-founder Garrett Camp too sold Uber shares but not to the extent of Kalanick’s massive sell-offs.
Along with Camp, Kalanick founded Uber in 2009 and served as its CEO until 2017, when he resigned amid a few scandals. Nevertheless, he remained on the company’s board.
Ever since going public on May 10, 2019, Uber’s shares have plunged more than 26% as it grapples with cost pressure, incurring successive quarterly losses.
Amid this downturn, Wedbush analyst Dan Ives believes, Kalanick’s imminent departure from the company is a positive in the sense that it will enable the current management to carve out its own growth trajectory. Ives is bullish on Uber’s overall prospects, anticipating improved growth metrics and profitability for the company in 2021, given its 100 million plus customers and “an unparalleled global monetization engine that is less than 3% penetrated today”.
Zacks Rank & Key Picks
Uber carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Marchex, Inc. (MCHX - Free Report) , Akamai Technologies, Inc. (AKAM - Free Report) and InterXion Holding N.V. . While Marchex and InterXion sport a Zacks Rank #1 (Strong Buy), Akamai Technologies carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Marchex, AkamaiTechnologies and InterXion have surged more than 43%, 39% and 52%, respectively, in a year’s time.
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