Financial expert and global investor, Hamish Douglass, has described the ride-sharing service, Uber, as a Ponzi scheme.
Douglass, a cofounder of the Magellan Financial Group, which manages more than $37 billion, also said Uber has a less than one percent chance of surviving the next decade.
“It’s constantly losing money, and its capital-raising strategy is a ponzi scheme,” Douglass said at the annual Stockbrokers and Financial Advisers Conference in Sydney.
Douglass said Uber is under threat from the arrival of autonomous cars, in which he did not think ride-sharing business has an advantage.
“When I look at Uber … I think of it as one of the most stupid investments in history,” the Australian Financial Review reported him as saying.
“The probability of this business going bankrupt in a decade is 99 percent” because the barriers to entry to ride-sharing are low, he added.
“All they do is keep increasing their private-market valuation, and someone always says, I’ll put some money up, because next time they raise, it’ll be at a higher price,” Douglass further affirmed.
Uber was founded in 2009 in San Francisco and now operates in 58 countries and is valued at more than $60 billion.
The 2016 BRW Rich list puts Douglass’ net worth at about $376 million.
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