Uber Technologies’ stock surged on Tuesday after the ride-hailing company delivered very upbeat guidance.
The stock closed at $44.36, up 11.5 percent on the day.
This was good news for the slew of high-profile hedge funds that made big bets on the company in the second quarter.
Uber said in a regulatory filing that it posted its first months of profitable cash flow in July and August.
As a result, it now expects adjusted EBITDA (cash flow) in the third quarter to range between a loss of $25 million and a profit of $25 million, compared with its previous guidance of “better than a loss of $100 million” with “strong improvements” in both its mobility and delivery businesses.
For the fourth quarter, it now expects to report adjusted EBITDA between $0 and $100 million, compared with its previous vague forecast of “adjusted EBITDA profitability.”
“They say that crisis breeds opportunity, and that’s certainly been true of Uber during the last 18 months,” said CEO Dara Khosrowshahi in the filing. “Thanks to the team’s tireless work we’ve not only grown our global leadership across both Mobility and Delivery; we’ve done so more profitably than ever before.”
As a result, Khosrowshahi said Uber is reaching an important milestone. “We also know we have much left to prove and need to execute flawlessly,” he added. “We will rise to the occasion.”
As of the end of the quarter, 156 hedge funds held a position in Uber, a net increase of four hedge fund investors compared with the prior quarter, according to Novus, the data tracker which has perhaps the most comprehensive database of hedge fund stock ownership.
Many hedge funds made very big bets in the second quarter.
For example, Jericho Capital Asset Management bought nearly 4.3 million shares in the second quarter, accounting for virtually all of the 4.4 million shares or so that it owned at the end of the period. Uber is now Jericho’s fourth largest U.S. long, accounting for roughly 5 percent of the assets.
In the quarter, SRS Investment Management established its entire stake of 3.44 million shares, while Appaloosa Management established its entire stake of more than 2 million shares.
In addition, D.E. Shaw bought more than 2.8 million shares last quarter, boosting its total to more than 8 million shares.
Eminence Capital, meanwhile, boosted its stake by nearly 60 percent, making Uber its ninth largest U.S. long position.
And Sachem Head Capital Management established a new position of 1.55 million shares, immediately qualifying as a top-10 U.S. long.
Other big purchasers in the second quarter were Third Point and Balyasny Asset Management.
Meanwhile, the stock is the fourth largest long of Valiant Capital Partners.
Of course, there is no way of knowing what price each of these hedge funds paid for their shares.
However, so far, no one is making money on their second quarter bet.
On Tuesday the stock still closed below the lowest possible price anyone could have paid between April and June.
