“It’s constantly losing money, and its capital-raising strategy is a Ponzi scheme,” the co-founder, Hamish Douglass, said at the annual Stockbrokers and Financial Advisers Conference in Sydney.
Douglass says Uber is under threat from the arrival of autonomous cars, in which he doesn’t think ride-sharing business has an advantage.
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He referred to Uber as one of the most stupid investments in history with a high probability of going bankrupt.
“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%.”
And the competition is coming because the barriers to entry to ride-sharing are low.
“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 says.
Uber was founded in 2009 in San Francisco and now operates in 58 countries and is valued at more than $60 billion.
Douglass and Chris Mackay founded Magellan a decade ago on the investing principles of Warren Buffett at Berkshire Hathaway.
The 2016 BRW Rich list shows Douglass’ wealth at about $376 million.
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