When you click on links to various merchants on this site and make a purchase, this can result in this site earning a commission. Affiliate programs and affiliations include, but are not limited to, the eBay Partner Network.
Uber Proposals Value Company at $120 Billion in a Possible IPO
Eye-popping offering, which could take place early next year, is nearly double the ride-hailing company’s valuation in a fundraising round two months ago
Oct. 16, 2018
Uber Technologies Inc. recently received proposals from Wall Street banks valuing the ride-hailing company at as much as $120 billion in an initial public offering that could take place early next year, according to people familiar with the matter.
That eye-popping figure is nearly double Uber’s valuation in a fundraising round two months ago and more than General Motors Co. , Ford Motor Co. and Fiat Chrysler Automobiles NV are worth combined.
Uber’s plans now set up a race with rival Lyft Inc., which is also eyeing a debut in the first half of the year, The Wall Street Journal separately reported Tuesday. Lyft’s valuation is expected to top the $15.1 billion it sold shares at privately this year.
Goldman Sachs Group Inc. and Morgan Stanley delivered the valuation proposals to Uber last month, the people said. These documents, which typically advise on how to position shares to potential investors, are a common step before banks are formally hired to underwrite IPOs.
The bank presentations show Uber gathering momentum toward an IPO that is among the most hotly anticipated on Wall Street and Silicon Valley and could come sooner than expected as the new-issue market sizzles. Founded in 2009 and sustained by an ample supply of private capital, Uber is seen as a bellwether for a crop of highly valued startups that have delayed tapping the public markets.
Over the past year, Uber has labored through a series of scandals, from claims of workplace sexual harassment to the alleged theft of trade secrets from rival Alphabet Inc. and the ouster of co-founder Travis Kalanick. Its new chief executive, Dara Khosrowshahi, has sought to win back investors, drivers and riders who can now choose from a growing group of taxi smartphone apps.
Mr. Khosrowshahi had previously said the company is aiming for an IPO in the second half of 2019; at what valuation has been unclear. Uber last raised money, from Toyota Motor Co. in August, at a $76 billion valuation.
There is no guarantee Uber will go public within the expected time frame or at the valuation envisioned by investment bankers hungry for fees.
Competition in ride-hailing has stiffened, which could make Uber shares a tougher sell with public investors. Any IPO process could also be complicated by factions among Uber backers, who received their shares at widely varying valuations.
In documents distributed in recent days related to a potential bond offering — led by Morgan Stanley — Uber indicated it won’t be profitable for at least three years, according to people familiar with the matter. It expects to generate between $10 billion and $11 billion in revenue this year, according to the documents, compared with $7.78 billion last year.
As part of an agreement with investor SoftBank Group Corp., Uber must go public by the end of next year, according to people familiar with the matter. If it fails to do so, Uber would have to allow certain investors — those who have put in at least $100 million or held shares for at least five years — to sell their stakes on the secondary market, these people said.
Should Uber debut at anywhere near a $120 billion valuation, it would deliver spectacular returns for early investors.
First Round Capital, for example, invested about $1.6 million in Uber’s first two rounds in 2010 and 2011, according to term sheets reviewed by the Journal. At a valuation of $120 billion, those shares would be worth more than $5 billion.
Another big winner would be Benchmark, whose Uber stake is currently valued at about $8 billion and would be worth about $14 billion, according to an analysis by the Journal.
More than 50 firms have invested in Uber over the years, according to startup tracker Dow Jones VentureSource, not including many individuals who have also put in money. Among them: Amazon.com Inc.’s Jeff Bezos, Alphabet Inc. and Goldman, which stands to make hundreds of millions of dollars on an early stake in the ride-hailing pioneer.
An IPO could also enrich Mr. Kalanick. In January, he sold shares to SoftBank for about $1.4 billion and still owns a stake that at the proposed valuation could be worth billions of dollars more.
The valuations — Goldman’s is slightly lower than Morgan Stanley’s, according to one of the people — hinge in part on highlighting the potential of Uber’s businesses outside its ride-hailing app, like the company’s food-delivery service, UberEats, some of the people said. The valuations also take into account its stakes in other transportation startups including China’s Didi Chuxing Technology Co. and Singapore’s Grab.
Calving off Uber’s self-driving car unit could free it to license its technology to a wider array of car makers and transportation companies. Doing so would remove a business that burns hundreds of millions a year and also insulate Uber from negative headlines like those that appeared earlier this year after one of its vehicles struck and killed a pedestrian in Arizona.
Uber Posts Slower Sales Gains, Widening Loss as It Prepares for 2019 IPO
Nov. 14, 2018 4:10 p.m. ET
Uber Technologies Inc. is seeing slower sales growth ahead of its planned initial public offering next year.
The ride-hailing company on Wednesday announced third-quarter revenue rose 38% from a year earlier to $2.95 billion, but that was less than the second-quarter year-over-year jump of 63%. Its loss widened to $1.07 billion from $891 million in the second quarter.
Uber has accrued roughly $2.5 billion in losses this year, not including the sale of its unprofitable businesses in southeast Asia and Russia. Last year, Uber lost about $4.5 billion.
In preparation for the company’s planned IPO, Chief Executive Dara Khosrowshahi has been working to shore up Uber’s finances, including closing or selling unprofitable units and paring expenses.
Bankers hoping to help Uber with its plan to go public have valued the company on the public markets at as much as $120 billion, more than double its valuation from a recent funding round.
“We are investing in future growth across our platform, including in food, freight, electric bikes and scooters,” said Nelson Chai, Uber’s new chief financial officer. He said Uber is also focusing its efforts on India and the Middle East, where it faces tough competition from local rivals.
In addition to bringing on Mr. Chai in September after a lengthy search, Uber has recently hired a new board chairman and a head of human resources, filling out crucial positions.
The results for the three months ending in September show that Uber is still growing quickly but is likely to be unprofitable for some time. In documents for a bond offering last month, Uber said it expected it wouldn’t reach a profit for at least three years.
Uber has turned its attention to providing customers with a host of transportation options in addition to its core ride-hailing service. Mr. Khosrowshahi said he is particularly hopeful about electric-scooters and bicycle rentals, which he has said can be a low-cost replacement for short car trips in urban centers.
“What we’re going after is essentially to debundle car ownership,” Mr. Khosrowshahi said in an interview at The Wall Street Journal’s WSJ Tech D.Live conference Tuesday. “A world in which the people who cannot afford to buy a car have access to consistent mobility wherever they are, that’s a better world.”
Uber’s Eats prepared-food-delivery program was a bright spot. Gross bookings, or the total order value, for Eats reached $2.1 billion in the quarter—more than double the year-ago result, Uber said.
Gross bookings overall, which includes the freight unit along with ride-hailing and Eats, grew by 34% from a year earlier to $12.7 billion, down from 41% year-over-year growth in the second quarter.
In August, the San Francisco startup reached a deal with Toyota Motor Corp. for a $500 million investment to help Uber’s costly self-driving car division. Some investors have questioned the wisdom of continued investment into autonomous vehicles, particularly after one of them struck and killed a pedestrian in March. In response, Uber suspended on-road testing of the cars and cut staff in its self-driving car division. The company recently released a safety report on its website promising two human safety drivers in each vehicle, among other reforms.
Uber Technologies Inc. filed paperwork confidentially this week for its initial public offering, according to people familiar with the matter, as it races with smaller rival Lyft Inc. to be the first to market.
The S-1 filing with the Securities and Exchange Commission puts Uber neck-and-neck with Lyft. Both planned IPOs are shaping up to be among the biggest in a spate of offerings aimed for 2019. Lyft said Thursday it had filed its S-1, and people familiar with the matter have said it is aiming to debut in March or April.
Uber’s filing indicates it could go public as soon as the first quarter, as The Wall Street Journal reported in October. That would be sooner than many observers had expected. Uber Chief Executive Dara Khosrowshahi has said he expected to seek a debut in next year’s second half.
Uber has dubbed planning around its IPO “Project Liberty,” according to one of the people familiar with its plans.
That may be a sly reference to the thousands of employees and investors who have waited years to sell their full stake in the company for a profit, one person said. Uber has held recent secondary sales, allowing some investors and workers to sell a portion of their stakes.
Details of Uber’s filing, including exactly when it was submitted, weren’t immediately available. The company’s banking advisers have suggested the ride-hailing firm could go public at a valuation of $120 billion, the Journal has reported. The firm’s most recent private valuation was $76 billion, when it sold a roughly $500 million stake to Toyota.
Based on the pipeline of potential IPOs, which includes data-mining company Palantir Technologies Inc., Slack Technologies Inc. and Airbnb Inc., 2019 could be a record-breaking year for market debuts in terms of dollars raised. It could top the high-water mark reached in 2000, when tech companies raced to cash in on lofty valuations at the height of the dot-com boom.
Uber and Lyft, along with companies outside the U.S. like China’s Didi Chuxing Technology Co. and Singapore’s Grab, have radically changed the way people get around in urban areas and have upended traditional cab businesses. The companies have leveraged their core businesses to expand into other services, like meal delivery and bike sharing.
But Uber, like Lyft, is unprofitable. Its third-quarter loss widened to $1.07 billion amid a sales gain of 38% to $2.95 billion, and it has indicated in recent bond-offering documents it doesn’t expect to get out of the red for at least three years. Lyft had a loss of $254 million on sales of $563 million in the most recent quarter, the Journal has reported.
Lyft has raised $5.1 billion to date, compared with about $20 billion for Uber. Both figures include debt financing. Uber has 20,000 employees world-wide, which is four times more than Lyft has.
For its presentations to potential investors, Uber is likely to emphasize the success of its side projects such as prepared-food-delivery unit UberEats and trucking business Freight, people familiar with the matter have said. It operates in about 70 countries world-wide, while Lyft is just in the U.S. and Canada.
Uber had 69% of the U.S. market, while Lyft had 28% as of October, according to Second Measure, which tracks credit-card spending data.
Mr. Khosrowshahi has put IPO planning at the forefront of his work in recent months. Among recent hires are the company’s first chief financial officer in more than three years, a new chairman and a chief compliance officer.
Uber is also weighing strategic transactions ahead of the IPO, including mergers and acquisitions, that could push out the timeline by several months, people familiar with matter said. Mr. Khosrowshahi and Uber expect that these deals, should they come together, could boost the valuation in the offering, these people said.
Uber is still investing heavily in its self-driving-car division, which cost about three-quarters of a billion dollars to operate in 2017. After a fatal accident in March involving one of the robot vehicles, Uber has taken the vehicles off the roads, closed its operations in Arizona and cut staff in other offices, including Pittsburgh. It has a pending application to return the high-tech autos to roads in Pennsylvania.
Although Mr. Khosrowshahi has pledged his support for continued investment in self-driving vehicles, some investors and executives have urged him to further cut spending or dispatch the division.
As it steers toward a planned initial public offering later this year, Uber Technologies Inc. is hitting a bumpy patch on sales.
The ride-hailing company said Friday that fourth-quarter revenue rose 25% from a year earlier to $3.02 billion.
While rapid by the standards of most businesses, the pace was the slowest since Uber began disclosing detailed financial results two years ago, and showed growth continuing to skid downward from 38% in the third quarter and 70% in the first.
Uber narrowed its net loss in the latest period, to $865 million from $1.07 billion in the third quarter. For the full year, the San Francisco-based startup reported a loss of about $3.3 billion, excluding a one-time gain from the sale of unprofitable businesses in Russia and Southeast Asia, compared with $4.5 billion in 2017.
Uber is aiming for an IPO that could value it at as much as $120 billion. Chief Executive Dara Khosrowshahi has worked to shore up the company’s balance sheet by selling unprofitable units and completing fundraising including investments from SoftBank Group Corp. and Toyota Motor Corp. , and a large debt sale.
But the company is still struggling to control expenses, including incentive payments for drivers to keep them on the road longer and away from rivals such as Lyft Inc., which is also planning an IPO this year.
Uber has been investing in new businesses like its Eats food delivery service, which has been growing rapidly, as well as the Freight shipping unit and electric scooters and bicycles.
“Last year was our strongest yet, and Q4 set another record for engagement on our platform,” Nelson Chai, Uber’s chief financial officer, said in a statement. “We believe Uber Eats became the largest online food delivery business outside of China, based on gross bookings.”
That measure, which includes the full amounts Uber takes in before paying drivers, increased 31% to $14.2 billion, from $10.8 billion in the final quarter of 2017. That is also slower than the prior quarter last year, when gross bookings grew by 34%.
Uber will have to plead for patience from investors as it embarks on its roadshow later in the year. In bond documents for a roughly $2 billion offering last year, Uber said it didn’t expect to be profitable for at least three years.
As a result, Uber has been working to call attention to its Eats business in particular, which the company has said is on track to achieve $10 billion in overall sales this year, up from about $6 billion last year. Uber takes a commission of around 30% from many restaurants for the service, which connects them to customers through its app and delivers the food to their homes.
Uber still retains a comfortable cash cushion. It had $6.42 billion in cash and cash equivalents at quarter’s end, up from $4.39 billion a year earlier. But it also burned through $645 million in operations during the quarter, compared with $487 million in the third quarter.
Lyft’s planned IPO, expected to come before Uber’s, is likely to be a bellwether for the industry. Unlike its rival, Lyft has no ancillary business outside of ride-hailing and has expanded only to Canada outside the U.S., its home market. It also is unprofitable.
Uber’s most recent private valuation was $76 billion compared with $15.1 billion for Lyft. Their IPOs are expected to be part of a big year for tech debuts, potentially including Palantir Technologies Inc., Airbnb Inc., Slack Technologies Inc. and Postmates Inc.
Exclusive: Uber plans to kick off IPO in April - sources
March 14, 2019
(Reuters) - Ride-hailing company Uber Technologies Inc is planning to kick off its initial public offering in April, putting it close on the heels of smaller rival Lyft Inc, people familiar with the matter said on Thursday.
Next month, Uber will issue its required public disclosure, known as an S-1, and launch its investor roadshow, the people said. Those events will set in motion the Wall Street debut of one of Silicon Valley’s most closely watched companies.
The timing for Uber’s IPO means it will most likely hit public markets soon after Lyft completes its own public offering, which is expected to happen by the end of March, people familiar with the matter said. Uber declined to comment.
The neck-and-neck race extends a long-held rivalry between the two loss-making companies, which have battled each other for riders and drivers since their inception.
Uber’s business is much larger and more diverse than Lyft’s, and the company has moved relatively swiftly to go public given both firms filed confidential paperwork for an IPO at the same time in December.
Uber, a global logistics and transportation company most recently valued at $76 billion in the private market, is seeking a valuation as high as $120 billion, although some analysts have pegged its value closer to $100 billion based on selected financial figures it has disclosed.
Lyft, a smaller firm which has ride-hailing and bike-renting in the United States and several Canadian cities, is seeking a valuation of $20 billion to $25 billion, up from its $15 billion valuation as a private company.
Uber’s revenue last year was $11.3 billion, while its gross bookings from rides were $50 billion. But the company lost $3.3 billion, excluding gains from the sale of its overseas business units in Russia and Southeast Asia.
Lyft’s revenue for last year was $2.2 billion, with $8.1 billion in gross ride bookings. The company lost $911 million.
Uber will have the challenge of explaining and selling to investors a business that is more complex and less focused than Lyft’s.
Uber’s business operates in more than 70 countries and includes not only ride-hailing but also bike- and scooter-rentals, freight hauling, food delivery and an expensive self-driving car division.
SoftBank’s Vision Fund and Toyota Motor Corp are part of a consortium of investors in talks to invest $1 billion in Uber’s self-driving car unit, Reuters reported on Wednesday. Taking on large investors that will influence a key business is an unusual move for a company so close to an IPO.
Uber plans to sell around $10 billion worth of stock in IPO
April 9, 2019
(Reuters) - Uber Technologies Inc has decided it will seek to sell around $10 billion worth of stock in its initial public offering, and will make public the registration of the offering on Thursday, people familiar with the matter said on Tuesday.
Uber is seeking a valuation of between $90 billion and $100 billion, influenced by the poor performance of smaller rival Lyft Inc’s shares following its IPO late last month, the sources said. Investment bankers previously told Uber it could be worth as much as $120 billion.
Uber most recently was valued at $76 billion in the private fundraising market.
Most of the shares sold would be issued by the company, while a smaller portion would be owned by Uber investors cashing out, one of the sources said.
Uber plans to make its IPO registration with the U.S. Securities and Exchange Commission publicly available on Thursday, and will kick of its investor roadshow during the week of April 29, putting it on track to price its IPO and begin trading on the New York Stock Exchange in early May, the sources said.
In moderating its valuation expectations, Uber is showing a realism that is being increasingly adopted by Silicon Valley unicorns, as stock market investors push back against some of the lofty price tags sought.
Uber last year had revenue of $11.3 billion, while gross bookings from rides was $50 billion. But the company lost $3.3 billion, excluding gains from the sale of its overseas business units in Russia and Southeast Asia.
At $100 billion, that would give them a Price-to-Sales ratio of 8.85
Uber Technologies Inc. is aiming for a valuation in its impending initial public offering of as much as $100 billion, below previous expectations, as ride-hailing competitor Lyft Inc. stumbles in its early days of trading as a public company.
Uber recently provided documentation to holders of its convertible notes that sets a potential price range of $48 to $55 a share, according to people familiar with the matter.
That would equate to an aggregate valuation of between $90 billion and $100 billion, including the roughly $10 billion Uber expects to raise in the offering.
Investing in our common stock involves numerous risks, including the risks described in the section titled “Risk Factors” and elsewhere in this prospectus. You should carefully consider these risks before making an investment. The following are some of these risks, any of which could have an adverse effect on our business financial condition, operating results, or prospects.
.
The personal mobility, meal delivery, and logistics industries are highly competitive, with well-established and low-cost alternatives that have been available for decades, low barriers to entry, low switching costs, and well-capitalized competitors in nearly every major geographic region.
.
To remain competitive in certain markets, we have in the past lowered, and may continue to lower, fares or service fees, and we have in the past offered, and may continue to offer, significant Driver incentives and consumer discounts and promotions.
.
We have incurred significant losses since inception, including in the United States and other major markets. We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability.
.
Our business would be adversely affected if Drivers were classified as employees instead of independent contractors.
.
If we are unable to attract or maintain a critical mass of Drivers, consumers, restaurants, shippers, and carriers, whether as a result of competition or other factors, our platform will become less appealing to platform users.
.
. . . .
. . . .
We may fail to develop and successfully commercialize autonomous vehicle technologies and expect that our competitors will develop such technologies before us, and such technologies may fail to perform as expected, or may be inferior to those developed by our competitors.
Uber Technologies Inc. made its IPO papers public Thursday, revealing some of the secrets of a company with big, global ambitions that faces slowing growth in its core ride-hailing business.
The filing shows that the spectacular growth Uber has enjoyed in its core ride-hailing business has leveled off lately. The company’s revenue from ride-hailing — excluding items such as driver referrals and some incentives — was $2.31 billion in the fourth quarter, little changed over the prior six months.
. . . .
The filing document exposes to wider public view a 10-year-old company that has changed how millions of people get from place to place and represents one of Silicon Valley’s biggest recent success stories: Uber’s growth has been explosive, with overall revenue jumping from just $495 million in 2014 to $11.27 billion last year.
But that growth hasn’t come cheaply. The company’s total losses on operations — excluding items like sales of business units — totaled more than $10 billion between 2016 and 2018, and were $3.03 billion last year alone. That is an astounding sum for any large corporation, even a cash-hungry startup. Uber has raised nearly $20 billion since its founding, including from debt—by far the most ever for any U.S. startup, according to PitchBook.
And Uber is under stiff competitive threat. The company’s market share has been flagging amid fierce competition and a series of prior missteps. Uber said its ride-hailing market share “generally declined in 2018 in the substantial majority of the regions in which we operate,” hurt by subsidies and discounts by competitors. Uber had 67% of U.S. ride-hailing market share in February, down from 78% two years earlier, according to Second Measure Inc., which analyzes credit card transactions.
The filing also shows a company that has built big businesses in Europe, India and Latin America and whose ambitions stretch beyond ride-hailing.
Uber also operates a food-delivery service called Uber Eats, a trucking business called Uber Freight and a shared scooter and bike arm called Jump. Eats has grown quickly, from virtually nothing a few years ago to represent more than 13% of Uber’s total net revenue in 2018, or $1.5 billion.
Still, it is a highly competitive business as venture capital has flooded into competitors like DoorDash. Freight and bikes and scooters brought in $225 million revenue.
Lyft, by contrast, focuses mainly on ride-hailing in the U.S. and Canada. Its revenue more than doubled last year to $2.2 billion, and it recorded a net loss of $911 million.
Unlike many companies debuting, Uber won’t have supervoting shares and touted that in the filing.
New price range: between $44 and $50, down from $48 to $55. And PayPal buying $500 million worth of stock
Will raise up to $9 billion. Combined with the $6.4 billion they had at end of December 31, 2018, that will allow them to operate in the red for a long time. Much longer than Lyft
Uber Technologies, Inc. is offering 180,000,000 shares of its common stock. The selling stockholders identified in this prospectus are offering 27,000,000 shares of common stock if and to the extent that the underwriters exercise their option to purchase additional shares described below. We will not receive any of the proceeds from the sale of shares by the selling stockholders. This is our initial public offering, and no public market currently exists for our shares. We anticipate that the initial public offering price will be between $44.00 and $50.00 per share.
PayPal, Inc. has entered into an agreement with us pursuant to which it has agreed to purchase $500 million of our common stock in a private placement at a price per share equal to the initial public offering price.
With 1.677 billion shares outstanding, that gives Uber a valuation of approx. $84 billion.
They lost $1.8 billion for all of 2018. They lost over $1 billion in first 3 months of 2019
Uber Outlines First-Quarter Results After Cutting Valuation Target
April 26, 2019
Uber Technologies Inc. moved its target valuation lower, setting a range of about $80.5 billion to $91.5 billion for its initial public offering, and gave hungry investors a look at its first-quarter financials.
The ride-hailing giant set a price range for its stock of between $44 and $50 apiece in a filing Friday morning, the first time it has revealed the expected price for its stock publicly.
It had previously given documentation to holders of its convertible notes outlining a potential price of $48 to $55 a share, which would have been a valuation between $90 billion and $100 billion on a fully diluted basis.
Its exact IPO price will be decided over the coming weeks as Uber executives engage in formal pitch meetings with potential investors, and it could still rise depending on their interest.
. . . .
In the filing, Uber also revealed unaudited first-quarter results that confirmed recent trends for the company: Its revenue growth is slowing, and it is continuing to post burgeoning losses.
Overall, the first-quarter net loss attributable to the company ranged from $1 billion to $1.11 billion, compared with a loss of roughly $890 million in the fourth quarter. Total revenue ranged from $3.04 billion to $3.1 billion, growth of roughly 20% from the year-earlier quarter and less than 5% from the prior quarter.
Ride-sharing gross bookings for the first quarter ranged from $11.28 billion to $11.45 billion, growth of roughly 20% from a year earlier.
Uber’s filing also confirmed The Wall Street Journal’s earlier reporting that some investors will be able to unload parts of their pre-IPO stakes in Uber through the so-called overallotment option, which gives underwriters the option to sell more shares after the stock starts trading. Structuring the deal this way allows Uber to raise the money it seeks while potentially letting some investors cash out parts of their stakes in the offering.
Among the current investors in line to sell stock are Uber co-founder Travis Kalanick, who aims to sell roughly 3.7 million shares, and entities affiliated with early venture-capital investor Benchmark Capital, which aims to sell more than 5.7 million shares, according to the filing.
Uber Set to Price IPO at Midpoint of Target Range or Below
May 8, 2019
Uber Technologies Inc. is on track to price its initial public offering at the midpoint of its target or below, according to people familiar with the matter, following a big stock-market drop and the disappointing debut of rival Lyft Inc.
Uber is in the middle of pitching investors across the country on its shares, which are set to price Thursday ahead of a Friday trading debut. The ride-hailing giant has set a range of $44 to $50 share, or about $80 billion to $90 billion, already down from its earlier indication.
Investors are still putting in their orders for the shares and things could shift before the price is set later Thursday. There is currently enthusiasm for shares in the bottom half of the range, one person familiar with the matter said.
If the stock is priced at the $47-a-share midpoint, Uber’s valuation on a fully diluted basis would be roughly $86 billion. In the weeks before it officially set a price range, Uber had provided documentation to holders of its convertible notes setting a potential band of $48 to $55 a share, or $90 billion to $100 billion, including what it expects to raise in the offering—now about $8 billion to $10 billion. Last year, lead underwriters Morgan Stanley and Goldman Sachs Group Inc. had pitched the company on a valuation of as much as $120 billion.
I believe there will be an opportunity down the road to pick it up for less than $45. There's a price point where this could be a decent speculative investment. Going by how Lyft IPO turned out, might be good idea to wait until after Uber's 1st public earnings report.
There's a big thread about this on uberpeople.com. The general consensus is not to touch it. Between the way Lyft's stock has gone, trade wars with China and the recent strike (which didn't have much effect on Uber but seemed to scare some stockholders), it seems inevitable that this is going to be a dumpster fire.
IMO, the real bet is on autonomous vehicles. If Uber can put out self-driving cars in the next few years then I could see their stock rising dramatically in the long term. I personally don't have much confidence in self driving cars becoming mainstream in less than 10 years so I'm not buying in.
Uber Technologies Inc. skidded into the public markets Friday, falling 7.6% below the ride-hailing giant’s already conservative offering price in a bleak debut for the nation’s most valuable startup.
The company’s shares closed their first day of trading at $41.57, a rare initial drop for a high-profile stock. That gives Uber a valuation of roughly $76 billion.
Only eight of the 53 U.S.-listed companies that were worth at least $10 billion when they went public declined on their first day, according to Dealogic, whose data goes back to 1991.
The drop is a blemish for the San Francisco-based company, which staged one of the most anticipated IPOs ever. It took a conservative approach to pricing the IPO to entice buyers: After dialing back valuation expectations, Uber priced near the low end of its target range. But the strategy wasn’t conservative enough.
After a celebratory bell-ringing ceremony at the New York Stock Exchange, the trading floor got quiet and the mood soured as orders came in and it became clear the stock would open in the red. About 10 minutes before noon, more than 30 million shares changed hands at $42, kicking off trading below the $45 IPO price.
The total money lost by investors who bought shares in the Uber IPO was the most since at least 1975, according to Jay Ritter, a professor at the University of Florida who tracks IPOs back to 1975. At Uber’s closing price, investors who bought into the IPO lost $617 million. The next-biggest loss was Genuity, whose investors lost $276.5 million the day it was spun out of Verizon in 2000. Other IPOs have performed far worse on a percentage basis, but the amount of money lost is so large in Uber’s case because its offering—it raised $8.1 billion—was so big.
Morgan Stanley was tasked with stabilizing the stock by buying more of it if needed, a coveted role because of the prestige and potential additional revenue it can generate. On Friday, Uber’s stock bounced between $43.50 and $44.50 much of the day, but around 3 p.m. any efforts to prop it up stalled. Uber’s declines accelerated, and shares closed below their $42 opening level even as the broader stock market turned positive.
BlackRock, Other Big Investors Spoil Uber’s Coming-Out Party
May 19, 2019 12:54 p.m. ET
Uber Technologies Inc. grew to be the nation’s most valuable startup thanks to support from some of the biggest investors around. That support became a liability when the ride-hailing giant made its stock-market debut this month.
Some pre-IPO Uber shareholders including BlackRock Inc., the world’s largest money manager, and prominent tech investor Tiger Global Management took a pass on buying more shares in the listing, content that they already owned plenty, people familiar with the matter said. Instead, they tried to sell stock before or as part of the initial public offering.
The investors’ stance is emblematic of a wider lack of enthusiasm for the stock that has plagued Uber since it went public just over a week ago.
The market’s tepid response to the biggest IPO in years stems in part from the fact that Uber was the most richly funded private tech company, raising roughly $20 billion in equity and debt. That meant many investors companies typically count on to buy shares in their IPOs sat out Uber’s because they already had plenty of exposure to the company.
Uber’s stumble points up what could be a kink in the red-hot IPO market. Silicon Valley companies have been waiting longer and raising more before going public. That could mean some are past their prime in terms of growth and that investors like BlackRock that are increasingly investing before IPOs have more-limited interest in buying new shares.
One concern flagged by some prospective investors in Uber, which was founded 10 years ago: While its revenue growth has stalled in recent quarters, its losses keep mounting, and came in at more than $3.7 billion in the 12 months ended in March.
Uber’s disappointing entrance onto the public stage is an unfortunate development for the company and its underwriting team led by Morgan Stanley , even as some people close to the offering argue that broader market skittishness played a big role, and as that recedes the stock should rebound.
Excitement about Uber’s IPO had been building for years. Bankers raced to help the company raise capital with the expectation of multimillion-dollar IPO fees down the road. But leading up to the offering there were warning signs.
Smaller rival Lyft Inc.’s March debut soured quickly, and its shares were trading down by around 20% by the time it was Uber’s turn. The weekend before Uber’s IPO, President Trump tweeted a threat of higher tariffs on Chinese goods that he later followed up on, roiling stock markets around the world.
Still, the company and its underwriters didn’t fully appreciate the extent to which investors were cool to the offering until hours after they showed up at the New York Stock Exchange to kick off trading May 10.
In a surprise to those who believed the stock had been priced conservatively, it opened three dollars below the $45 IPO price set the night before. By the end of Monday, Uber, which last year was told by bankers at Morgan Stanley and Goldman Sachs Group Inc. that it could achieve a valuation of as much as $120 billion in an IPO, had a fully diluted market capitalization of about $68 billion.
Lack of support from key institutional shareholders like BlackRock loomed large, people close to the process say.
Multiple BlackRock funds had participated in a fundraising for Uber at a much lower valuation, and the firm decided it didn’t need to buy more in the IPO, according to people familiar with the matter. BlackRock held about 9.8 million Uber shares, according to a regulatory filing, now worth about $410 million. Weeks before the IPO, when Uber was still discussing a valuation of $90 billion to $100 billion, BlackRock added its name to the list of potential sellers as part of the overallotment option, or green shoe. It aimed to sell 414,000 shares, according to the filing.
Another big investor that was trying to decrease its stake was Tiger Global, which offered up a slug of its Uber shares several weeks before the IPO, people familiar with the matter said. Tiger sold about 30% of its $400 million stake for $53 a share—less than what the company was then expected to fetch. Tiger indicated to potential buyers that it was willing to take a big haircut to get some liquidity, the people said.
Despite the ominous signs, the mood was celebratory at a breakfast at the New York Stock Exchange for Uber’s board and employees the day of the IPO. The group then descended to the floor of the exchange, where they rang the opening bell and awaited the stock’s open.
The mood soon darkened. As orders came in, traders at Citadel Securities, Uber’s designated market maker, and the team at Morgan Stanley tasked with stabilizing the stock on behalf of the underwriters realized they didn’t have enough demand to open at $45 or higher. Just before noon, they opened the stock at $42 in an initial trade of more than 30 million shares. To help get to that level, Morgan Stanley had to buy stock right off the bat, people familiar with the matter said.
As part of the green shoe, the bank had discretion to sell 15% of the total offering size short. If the shares dropped in the early days or weeks of trading the bank could buy them back to try to prop up the price. Any stock it didn’t buy back it would purchase at the IPO price from shareholders including BlackRock.
As the day progressed, the stock’s decline accelerated, even as the broader market turned positive. The stock ended the day near session lows at $41.57.
Later that night, Uber Chief Executive Dara Khosrowshahi and Chief Financial Officer Nelson Chai joined other executives, investors and employees gathered on the floor of the exchange. They were served McDonald’s hamburgers in Uber Eats trays as well as other food and drinks.
Mr. Khosrowshahi, clearly tired from the week, gave a brief speech congratulating the team and reminding them that the IPO day was simply the beginning of a new phase in the company’s journey.
Just like with Lyft, not seeing a clear consensus on earnings/loss per share estimate. There's a loss of $1.49 per share and also a loss of $2.16 per share. As for revenue, it's estimated to be around $3 billion.
Uber Announces Date of First Quarter 2019 Results Conference Call
May 23, 2019
SAN FRANCISCO--(BUSINESS WIRE)--Uber Technologies, Inc. (NYSE: UBER) announced today it will release financial results for the first quarter 2019 after the close of the market on Thursday, May 30, 2019. Uber previously released some of its unaudited first quarter results as an estimated range in an amendment to its Form S-1.
On the same day, Uber will hold a conference call to discuss the results at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).
Will probably jump on the Jun 7 $40 puts on Tuesday
11-14-2018, 09:01 PM
LYFT: $52.91 : -$6.43 (-10.84%)
