Wednesday, December 6, 2023

Warren Buffett likes Uber’s strong brand and value to customers, his deputy told a leading tech investor

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  • Warren Buffett appreciates at least one thing about Uber, the famed investor’s deputy said.
  • “We like verbs in Omaha,” Ted Weschler said, according to Altimeter Capital’s Brad Gerstner.

Uber may be a far cry from the typical Warren Buffett stock, but he likes at least one aspect of the ride-hailing company, according to one of his deputies.

Brad Gerstner, the founder and CEO of Altimeter Capital, recently told the “Art of Investing” podcast that he discussed the ride-sharing app with Ted Weschler, one of Buffett’s two portfolio managers at Berkshire Hathaway.

Weschler told Gerstner that Uber is a technology company he can understand “because it’s a verb – you Uber.”

“We like verbs in Omaha,” Weschler continued, nodding to Buffett’s hometown where and Berkshire’s headquarters are located. “We get consumer products that people love and that are irreplaceable. And as far as we’re concerned, that’s the attribute that makes Uber most interesting.”

Buffett places great weight on profitability, predictability, and price when he invests, and aims to stay within his circle of competence by avoiding businesses he knows little about. As a result, he’s eschewed aggressively valued, lossmaking, disruptive technology companies for much of his career.

The Berkshire CEO appeared to diverge from that approach when he poured more than $30 billion into Apple between 2016 and 2018. The position has more than tripled in value since then, making the iPhone maker easily the biggest holding in Berkshire’s roughly $350 billion stock portfolio.

Buffett has explained that he doesn’t just like Apple’s heavy spending on stock buybacks and its market position; he also prizes its powerful brand and how indispensable its products are to customers.

Weschler’s comment to Gerstner suggests he views Uber in a similar light — as a brand so ubiquitous that people say they’ll “Uber” somewhere just like they “Google” information.

Uber CEO Dara Khosrowshahi.Leigh Vogel/Getty Images

Gerstner outlined on the podcast why he’s bullish on Uber in the years ahead. CEO Dara Khosrowshahi has cleaned up the company culture, he said, fixing a key problem from founder and ex-CEO Travis Kalanick’s time in charge.

He also suggested Uber’s days of burning through cash are over. The company made a net profit of nearly $500 million in the the first nine months of this year, after losing close to $10 billion during the same period of 2022.

Weschler, at least in Gerstner’s telling, didn’t suggest Berkshire would be purchasing a stake in Uber anytime soon.

Yet the gig-economy giant’s stock price has surged by 120% this year to its highest level since early 2021, making it an excellent bet for investors who’ve joined the ride recently.

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