I have built a substantial short position in CAB around the mid $2.80's region last couple of days.
Whilst Uber loses money as a company (still in growth phaze and normal for tech start ups)..BUT it is taking market share rapidly due to cost and convenience.
Australian regulators want a competitive taxi/personal transport market and are reducing charge fees on cards, it all spells bad news for CAB.
When the company paid millions of $ back to shareholders instead of investing in technology and services to compete with UBER, they showed their weak hand.
They have no hope or chance of competing with ride sharing apps that have billions of $ behind them and an army of geeks writing code every minute of the day. Uber is now also expanding into the delivery of food and goods in addition to normal passenger transport.
Market cap is $420 million when you add on the debt. The projected forward P/E ration looks ridiculously too high at around 20 !
Dividend likely to be cut as well sooner rather than later.
Chart below is hideous and has not done anything on the upside for 5 years !
The writing is on the wall that Cab Charge is and the share price will likely continue to suffer in months / years to come. Thus why I have taken a strong bearish view on the stock.
Will only exit shorts if TAXI regulations change, and that is very unlikely.
CAB Price at posting:
$2.77 Sentiment: Sell Disclosure: Held
