Re:SoftBank said to be trying to buy a big stake in Uber at ...
by btilly on Monday November 27, 2017 @08:12PM
(#15793409)
One justification is that spending on new shares gives them a higher return than spending on old.
When you spend on old, someone with no further interest in Uber has money in their pocket.
When you create new ones, you've just injected money into Uber, which increases its likelihood of survival.
If they are buying enough to get control, they can now choose to spend that $1 billion in ways that channel money back into other companies that they own. Thereby further reducing the cost to them of providing that money. (Presumably, though, the money channeled back will be for products that help Uber. This looks like a shell game but isn't.)
When you spend on old, someone with no further interest in Uber has money in their pocket.
When you create new ones, you've just injected money into Uber, which increases its likelihood of survival.
If they are buying enough to get control, they can now choose to spend that $1 billion in ways that channel money back into other companies that they own. Thereby further reducing the cost to them of providing that money. (Presumably, though, the money channeled back will be for products that help Uber. This looks like a shell game but isn't.)