While Tiger Global’s purchase is a big vote of confidence for eHi Car Services’ management, there is a caveat. Because Tiger Global has stakes in many tech companies, both public and private, eHi Car Services could go under and Tiger Global could still do well. All Tiger Global needs is for one of its many portfolio assets to become the next Facebook, and it will have good returns. Regular investors who don’t have the same risk tolerance as Tiger Global should not necessarily invest in the company. In the long run, Ehi Car Services Ltd (ADR) (NYSE:EHIC) will face increasing competition from car sharing apps that obviate the need to rent a car for many people. This will require continued stellar execution from eHi Car Services’ management in order to deliver value to shareholders, which can not reasonably be relied upon.
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