Bill Ackman reveals a position in Uber

Ackman runs a super-concentrated fund and rarely takes new positions.

Uber shares dumped on earnings earlier this week but stormed back the following day and continued higher today. This certainly won’t hurt.

I can make a pretty good case for Uber as it’s churning out a 5% free cash flow yield and still growing very rapidly.

The bear case is that Tesla and other robotaxis are going to destroy the business. However the bulls case — which the CEO has outlined — is that there are going to be many auto companies that solve autonomous driving. Even if Tesla solves it a year before anyone else, it can’t produce nearly enough cars to dominate the market before others catch up.

That will ensure it’s a fragmented market and that Uber remains at the center of the network ecosystem, taking what is essentially a royalty as it’s 180 million users continue to use it.

This article was written by Adam Button at www.forexlive.com.