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Uber should offload its debt to increase its valuation. (with link to model)

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  Uber should offload its debt to increase its valuation. (with link to model) With just 12% debt, Uber doesn't necessarily seem to borrow too much. But then again, the debt raised is costing the company too much through higher failure risk. Why is Uber borrowing money? Maybe tax benefits? The main benefit of debt is that it is tax-deductible, and taxes don't exist for a money-losing company. So that's not right. I think the main reason for Uber to fund itself with debt is to not lose control over the company, not raise equity capital and dilute its shares. If so, the additional failure risk is not worth it. Uber is still a young growth company and super unprofitable at the moment. And this unprofitability will require it to raise capital in the next few years in order to reinvest into the business. Hopefully, this time no more debt. Model:  UBERhastoomuchdebt   Love to talk about it.  Disclaimer: I own shares in UBER. This writing is for informational purposes only, is not
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(Part 2) AirAsia Group: Highly-levered Malaysian airline sweetheart. Gambling, or justified high-risk bet?

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(Part 2) AirAsia Group: Highly-levered Malaysian airline sweetheart. Gambling, or justified high-risk bet?  Star troopers? In my last post, I talked about what I think AirAsia Group’s direction is headed, and I used a traditional DCF valuation based on that story. It might seem surprising to see that the valuation output is surprisingly low, even with pretty decent assumptions. Before we give up on the company. I think traditional DCF models are unable to capture the true value of companies, especially those highly distressed. This is because, in a discounted cash flow approach, the primary assumption we make is that the company will be around in perpetuity, meaning, forever. It does not account for the fact that some companies, especially highly distressed, have a high probability of not surviving in the next few years. If traditional DCF models don’t work, let’s try some other approaches to valuation. Relative valuation: the pricing game Relative valuation is highly popular
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