Data Sheet—What’s Missing From Uber’s IPO

The word is that Uber has lowered its hoped-for valuation in its coming initial public offering to as low as $80 billion. That’s compared with the last guesstimated level of $100 billion and below the $120 billion its bankers previously hoped it would fetch. Oh, and there’s also news that PayPal will invest $500 million in Uber at its IPO price.

All this is quite interesting in the same way opinion polls are interesting in the time leading up to elections. The shifting valuations are like mood rings. Lowering valuations: bad! New, impressive backers: good!

As I wrote recently, Uber’s valuation has become anyone’s guess. It’s a big company with lots of customers, two growing lines of business (Uber Eats and Uber Freight), and an enviable collection of autonomous-vehicle scientists said to be hived off as a separate unit that will attract massive investment capital from automakers caught without their own critical mass of PhDs.

What Uber doesn’t have is profits or growth. And that’s not good. If Uber doesn’t make money and it’s not growing, it’s almost impossible to say what it’s worth. Just because it now thinks it can raise billions at an implied total value of $80 billion to $90 billion, and just because supposed smart money most recently invested at $76 billion, means nothing.

As for PayPal, it undoubtedly is making a commercial play: It wants most-favored-nation status as Uber’s payment option of choice. Given Uber’s volume—14 million trips a day, all paid with a credit card—payments are profitable to the processor regardless of whether Uber ever makes a dime.

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Fortune’s annual Brainstorm Tech conference in Aspen, Colo., is just over 10 weeks away: July 15-17. I’m excited to share a first spate of participants in the event, which brings together decision makers from the industry, from top executives to investors to the occasional fascinating visitor. (Uber CEO Dara Khosrowshahi said at last year’s event it will be important before Uber’s IPO for the company to show a path to profitability. Has it?)

This year’s crop includes Amy Hess, the FBI’s top cybercrime cop; CEOs Katrina Lake of Stitch Fix, Bob Swan of Intel, and Jennifer Tejada of PagerDuty; government officials Michael Kratsios (the top White House tech policy advisor) and Hester Peirce (a crypto-savvy SEC commissioner); PayPal’s Bill Ready; and Alex Norstrom, chief premium business officer of Spotify. (First question, Alex: What’s a “chief premium business officer”?) I’ll share other names soon.

Brainstorm Tech is an invitation-only event. Data Sheet readers can request an invitation by emailing me.

NEWSWORTHY

Stand and deliver. Finishing off Wall Street's busy, busy week, Amazon impressed, Intel looked distressed, and T-Mobile executives remained unstressed. At Amazon, sales jumped 17% to $59.7 billion and earnings per share almost doubled to $7.09, much better than analysts forecast–thank you very much, cloud services. But with Amazon stock already up 27% in 2019, it gained only another 1% in premarket trading on Friday. Intel reported flat revenue of $16.1 billion and forecast it would bring in $69 billion for the full year, 2% less than its last forecast. Its shares, previously up 24% on the year, tumbled 7%. T-Mobile had a record first quarter, with sales up 6% to $11.1 billion. Investors are fretting about whether the carrier's merger with Sprint will go through but CEO John Legere again predicted approval by the end of June. Shares were unchanged on Friday.

Soon all this will be yours. After buying most of 21st Century Fox, Disney grabbed control of 60% of streaming service Hulu. Now the entertainment giant is in talks to buy Comcast's 30% stake (and AT&T has already agreed to sell its 10% bit).

Refresh. Three longtime veterans of Apple's industrial design team under Jony Ive are leaving the company, the Wall Street Journal reports. Rico Zorkendorfer and Daniele De Iuliis left recently and Julian Hönig is departing in "coming months."

Drive off. Car rental giant Hertz is suing Accenture seeking to recoup $32 million in fees paid for a failed revamp of its online presence. Hertz says it's still waiting for a new website and mobile app from the project started almost three years ago. Accenture says the lawsuit is "without merit." And in the realm of possible future lawsuits, the rollout of Luminary's premium podcast network was marred by protests from many indy podcasters who said their shows were being hosted from the company's servers without permission.

When it rains, it pours and pours and pours. Thursday was another cr@p day for Facebook. The Attorney General of New York opened an investigation into whether Facebook violated state law by collecting users' email and contact data without authorization as part of a password verification process. “It is time Facebook is held accountable for how it handles consumers’ personal information,” AG Letitia James said Thursday in a statement. The company said it is responding to the AG's questions on the matter. Ireland's Data Protection Commission also started a probe of whether Facebook violated the GDPR by storing hundreds of millions of passwords in unencrypted format. And Canada's privacy commissioner says Facebook may have violated that country's laws due to “superficial and ineffective safeguards and consent mechanisms.”

FOR YOUR WEEKEND READING PLEASURE

A few longer reads that I came across this week that may be appealing for your weekend reading pleasure:

Warren Buffett: ‘I’m having more fun than any 88-year-old in the world’ (FT Magazine)
The legendary investor on luck, expectations and finding value in an overheated market.

Welcome to Shanghai, the capital of the future (The Globe and Mail)
Shanghai, one of the planet’s most populous urban centres, is growing at breakneck speed. But thanks to decades of planning, they’re doing it right. The city is destined for global supremacy.

Why Leonardo da Vinci’s brilliance endures, 500 years after his death (National Geographic)
His creativity and foresight in science, engineering, and the arts continue to surprise and amaze today.

The Best New Hotels in the World: The Stay List (AFAR)
“Where should I stay on my next trip to...?” In this issue, we’re answering that question with our first-ever Stay List, a compendium of the best new hotels in the world. These lodgings deliver more than just a place to rest our heads. They connect with their destinations and the people who live there. Each of these 27 extraordinary hotels has been personally vetted by our network of staffers and contributors.

FOOD FOR THOUGHT

In the 20th Century, American companies led breakthrough after breakthrough in the communications field. But now that concerns are growing about 5G gear supplied by China's Huawei, how is it that the only alternatives are a couple of European players? Kiran Stacey in the Financial Times takes a stroll down memory lane to figure out what the heck happened to the U.S. telecommunications equipment ecosystem. Perhaps too much of a free market approach in the 1996 Telecommunications Act?

Some say the battle that followed left large U.S. telecoms equipment makers — such as Lucent, which was spun out of AT&T and included Bell Labs — financially stretched, and the market as a whole fragmented. Tom Lauria, a telecoms analyst and former director at Lucent, said: “After the Telecoms Act of 1996, we had a massive number of entrants into the market. To keep them going, we would finance almost everything they bought until they became mature enough to pay the money back. This was not a sustainable model.”

IN CASE YOU MISSED IT

Bitcoin Tumbles After Officials Allege $850 Million Fraud By Jeff John Roberts

Verizon Reveals 20 More Cities Getting 5G Mobile this Year. Here's What You Need to Know By Aaron Pressman

Google Assistant Wants to Read to Your Kids Everywhere Your Family Goes By Emily Price

Verizon Media CEO Reveals His Plan For Reviving Struggling Online Business By Danielle Abril

Microsoft Joins the $1 Trillion Club By Chris Morris

Letters: The Kleiner Perkins Empire Is Alive and Well By John Doerr

BEFORE YOU GO

Modern marketing and branding campaigns require social media, everyone agrees. Now even the Central Intelligence Agency has decided to get in on the act, kicking off with its first Instagram post. "I spy with my little eye..." the agency captioned a picture of a desk with some various spy stuff scattered around. Stay tuned for perhaps more revealing photos further in the feed.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.