Who would have thought it: Uber (UBER) and Pinterest (PINS) executed so well that they actually were able to surprise to the upside. It's pretty monumental given that both of them had the orientation not that long ago of losing a lot of money to make a lot of money. Now they just want to make a little money and we discover that when they go for profitability they can get it.
What's really strange is that when you search for why and how the changes occur, they are really pretty subtle. I think that Pinterest simply got their advertising proposition, particularly, video, to work better. Customers always loved it and are still coming in record numbers. Uber seems deeply committed to making money now by getting out of lower margin portions of its business, notably the poorly performing portions of Uber Eats.
Both companies make me feel that they have pivoted from unicorn status and are now about showing Wall Street that they can make a lot of money if they want to. Pinterest put up 12 cents when the street was looking for 8 cents, which shows some real leverage to the model. They sounded like real business people on the call. I don't mean that negatively. The company was a little club-like. Not any more.
Uber's one of those companies that is sounding more and more like a platform that can be used for a host of businesses. There's so much that is suddenly working here that you have to believe the company was just ridiculously poorly run. Its been fixed. Discipline is a word I never associated with Uber. Most didn't. But the clean up has been done and the results are good ones.
It's not all done in fair weather. We had a real stinker of a company come public yesterday, Casper (CSPR) , a company using the old lose a lot of money but win unicorn strategy, that Uber and Pinterest used to use in a more forgiving market. Casper's one of those companies that should't have come public. There should have been someone, some firm, that said, "we aren't underwriting this and no one else should, too." It's a service that plays in the worst part of the housing market, the mattress. I know they have a much better business model than the bankrupt Mattress Firm but if that losing chain wanted to send mattresses in some cylinder it would probably do better. There's no reason for the company to even exist other than some founders got money and the guys who gave the money are powerful and could use their heft to get this deal done. Maybe, one day, it could very much be like Uber and Pinterest because it does sell at about one time sales. So it can turn profitable.
But for what?
Why don't we say this: two out of three ain't bad.