From ‘crazy’ to careful

[Bloomberg]( Follow Us //link.mail.bloombergbusiness.com/click/18547090.88611/aHR0cHM6Ly90d2l0dGVyLmNvbS90ZWNobm9sb2d5/582c8673566a94262a8b49bdBdb04cff3 [Get the newsletter]( Hi, everyone. It's [Shira](mailto:sovide@bloomberg.net). Masayoshi Son, the founder of SoftBank Group Corp., has joined the new religion for technology investing. On Wednesday, Son disclosed SoftBank's [third-quarter investment losses]( from bets on WeWork, Uber Technologies Inc. and other stakes. He also talked about his [fealty to corporate cash flow](, and putting appropriate guard rails on young companies. This was quite a change for a man who wanted companies to be [more "crazy."]( And it shows the pressure he's under to deliver financial returns for Vision Fund investors and [get cash for another one](. But Son's pivot also highlight the sudden change in attitude among stock investors that is calling into question the very foundation of company-building in the last decade. Uber executives, for example, started their third-quarter earnings call this week by discussing the company's efforts to [balance revenue growth with a move toward profits](. If you had told me at the beginning of the year that Uber would be talking about temperance, I don't think I would have believed you. [Temperance at Uber is relative](, to be sure. This year, Uber has bled 25 cents in cash for each dollar of revenue. Uber shares have declined 40% from their IPO price in May, and other highly valued startups haven't done much better as public companies. Uber's stock price hit a record low on Wednesday as [restrictions lifted]( on private investors and employees selling their stock in the company. I suspect share declines would be worse if Uber hadn't started responding to stock investors' sudden zeal for financial prudence from young companies. The shift to [worshiping at the altar of profits]( might not last. It was only a few years ago that [investors started to get anxious]( about the vast sums of money flying into unprofitable startups. The bubble didn't burst, but air deflated a bit from the balloon. Investments in startups pulled back for awhile, and some young companies died or still haven't recovered their valuation from those pre-2016 heady times. But then SoftBank [unveiled]( its nearly $100 billion tech investment fund, and it was off to the races again [at a speed]( that made the prior mania seem sober. The latest turn against fast-growing but possibly unsustainable young companies is isn't only about the specific struggles of WeWork and Uber, or SoftBank's bazooka of startup cash. Stresses on those companies call into question the entire model of funneling oodles of cash into a company to help it grow very big very fast. Of the more than $23 billion in stock Uber has sold in its entire lifetime, more than 90% of that came at share prices higher than Uber's current level. And for a good chunk of the rest, investors could have done nearly as well in a plain-vanilla equity index fund. This is the most successful company of the uber-unicorn era, and it's been a poor investment for nearly everyone. This could all turn around, of course. As every young tech company with a sagging stock price likes to say, Facebook Inc.'s share price stumbled in its first 15 months as a public company, before a turnaround that made the company one of the best stock investments of this decade. The problem with Uber and other growth companies is they couldn't exist in their current form without the tidal wave of cash available for ambitious startups in the last decade. And yet it's still not clear how much is a mirage. It's possible that the natural state of Uber and other high-flying unicorns is a healthy business whose economics don't look fundamentally different from the incumbent industries they're trying to bust up. That's hardly the ambitious vision behind the Vision Fund.  – [Shira Ovide]( Sponsored Content by [Darktrace]( As organizations embrace cloud services, the attack surface is increasing. Meanwhile, cloud-based threats are fast and unpredictable, often outpacing existing defenses. But cyber AI is changing the game. Thousands of companies use AI to detect and respond to advanced attackers in the cloud, before they do damage. [Learn what’s missing in cloud security and how cyber AI can help.](  And here’s what you need to know in global technology news: [California wants to force Facebook]( to cooperate with an investigation into possible violations of people's privacy. Facebook says it has cooperated extensively with the California attorney general's probe. Airbnb Inc. announced [policies]( to more closely screen listings by home owners and step up oversight of potentially troublesome renters. This was a response to a [story]( about scam listings and a recent [fatal shooting]( at an Airbnb "party house." The founder of Huawei Technologies Co. said there have been [no takers]( yet for the company's quixotic [offer]( to license its 5G technology to U.S. companies. Qualcomm Inc. projected [stronger-than-expected revenue]( for the current quarter, in a sign that smartphone demand might be picking up. Xerox Holdings Corp. is putting together a [potential acquisition offer]( for the larger and "[moderately sexier](" HP Inc. The Verge goes deep on the illogical logic [of elevator buttons](.  Like Bloomberg's Fully Charged? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. [Learn more](.  You received this message because you are subscribed to Bloomberg's Fully Charged newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022