Fare price – Ride-hailing firm Uber aims for $84bn valuation in year’s largest IPO


Fare price – Ride-hailing firm Uber aims for $84bn valuation in year’s largest IPO


The Uber Technologies app on the screen of a driver’s phone in Frankfurt, Germany. Photo: Alex Kraus/Bloomberg
The Uber Technologies app on the screen of a driver’s phone in Frankfurt, Germany. Photo: Alex Kraus/Bloomberg

Uber Technologies is seeking to raise as much as $9bn (€8bn) in an initial public offering that could give the ride-hailing giant a market valuation of as much as $84bn. The leading ride-hailing company plans to offer 180 million shares at $44 to $50 each, according to a regulatory filing made on Friday.

The filing puts Uber on track to make its trading debut in May on the New York Stock Exchange in what is expected to be the year’s biggest U.S. IPO. At the top of the range, the listing would value Uber at almost $84bn, based on the number of shares outstanding after the offering.

On a fully diluted basis, including the addition of stock options, restricted shares or other stakes not included in the outstanding total, the valuation could top $91.5bn.

PayPal has agreed to buy $500m of Uber’s stock at the IPO price in a private placement. The investment is part of a deal to extend the payment company’s partnership with Uber. The two companies plan to work together to develop a digital wallet for Uber, a spokesman for PayPal said.

Uber also provided a range for its first-quarter performance in the updated filing. Based on the midpoint of Uber’s projections, the company expects to have a net loss of $1.07bn on $3.07bn in revenue in the quarter. Revenue growth slowed to 19pc compared to 22pc in the same quarter last year.

At the low end of the range, Uber’s market valuation would be just $74 billion – below its last private funding round, in which Toyota invested at a valuation of about $76bn. Uber is taking a conservative approach to its valuation and could later raise the price depending on investor demand, people familiar with the matter have said.

Last year, bankers jockeying to lead the offering told Uber it could be valued at as much as $120bn in an IPO. Some recent big listings by technology unicorns have seen valuations come back down to earth after years of access to huge pools of private capital. Shares of Lyft, which made its market debut in March at a $20.5bn valuation after raising $2.34bn in its IPO, have since dropped 22pc – well below their IPO price. Uber’s rival has a market value of $16.1bn as of last Thursday, much closer to its last private funding round at $15.1bn.

Pinterest, meanwhile, has seen its shares soar since it priced its April 17 IPO below the last private valuation of $12.3bn. It closed 52pc above its trading debut at $28.80 on Thursday, valuing the digital scrapbooking company at $15.2bn.

Venture capital firm Benchmark, Uber’s second-biggest shareholder, plans to sell the most shares into the public offering, Friday’s filing shows. At the high end of Uber’s range the sale could net the firm $287m. It would still hold onto 8.5pc of Uber’s shares after the transaction. The SoftBank Vision Fund as well as Uber co-founders Garrett Camp and Travis Kalanick also intend to sell portions of their holdings.

San Francisco-based Uber’s offering is set to be among the 10 largest US IPOs of all time and the biggest on a U.S. exchange since Alibaba’s $25bn global record in 2014.

Other high-profile startups with plans to go public, or considering it, include Slack, Postmates, Palantir and Airbnb.


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Uber’s offering is being led by Morgan Stanley, Goldman Sachs, and Bank of America. The bankers, along with the company’s management, will be hitting the road to start marketing the stock to potential investors, according to a term sheet.

They’ll travel to cities including New York, London, Boston and San Francisco to pitch the shares, before aiming to set the final price on May 9, the terms show. The presentations are expected to feature comparisons to e-commerce kingpins Amazon and Alibaba.

In 2018, Uber lost $3.04bn on an operating basis on revenue of $11.3bn, bringing total operating losses over the past three years to more than $10 billion, according to earlier filings. The company reported a net income of $997m for 2018. The profit was mainly driven by Uber’s sale of assets in south-east Asia and Russia as well as an increase in the estimated value of its stock in Didi Chuxing, China’s largest ride-hailing company, to which Uber sold its Chinese business in 2016.


Sunday Indo Business


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