How to Blindly Invest in Uber

February 5, 2016, 2:03 PM UTC
Taxi Drivers Protest Possible Uber Expansion In NYC
NEW YORK, NY - JULY 20: An Uber vehicle is viewed in Manhattan on July 20, 2015 in New York City. New York's City Council has proposed two bills last month to limit the number of new for-hire vehicles, as well as to study the rapidly rising industry's impact on traffic. Uber has responded in an open letter arguing that its 6,000 Uber cars out during an average hour are a small part of the city's overall traffic. In cities across the globe Uber has upended the traditional taxi concept with many drivers and governments taking action against the California based company. (Photo by Spencer Platt/Getty Images)
Photograph by Spencer Platt — Getty Images

For some investors, just being invited to the party is good enough. They don’t need to meet the host.

That’s how it seems at Morgan Stanley, at least. A special fund at Morgan Stanley is offering wealthy clients the chance to invest in the hottest thing ever (a.k.a. Uber), but with one catch: The fund doesn’t provide investors with any details about Uber’s finances, according to the New York Times.

Big institutional investors in Uber receive revenue and expense numbers and projections, but not those in the Morgan Stanley fund, called New Riders L.P. That may in part be because investors in the fund will not directly own Uber equity.

According to the Times, the 290-page Morgan Stanley offering document for the fund warn that the bank “has conducted limited due diligence with respect to the company” and that it has not “independently verified the accuracy or completeness of such information.”

While many so-called Unicorns (private companies valued at more than $1 billion) have begun to crash to earth, and a number of Internet firms that went public are now trading below their IPO price, a select few—i.e. Uber—continue to demand (and get) blind faith from their investors. According to those interviewed by the Times, Uber’s last fundraising round valued it at $62.5 billion.

Or 62½ unicorns.

“Only Uber can do this,” Joshua M. Brown, a financial adviser at Ritholtz Wealth Management, told the Times. “They are the last of the gigantic unicorns that people are clamoring to get into.”


Of course, if Uber goes public at a huge valuation and saves the planet in the process, the New Riders investors with be laughing all the way to the bank. If not, however, we’ll quote a line from a recent Fortune piece about “Silicon Valley’s $585 Billion Problem”: Good luck getting out.

Morgan Stanley declined to comment for this story.

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.

Read More

CryptocurrencyInvestingBanksReal Estate