Uber Plans to Go an IPO

Cornelia Mascio
Aprile 14, 2019

Chief Financial Officer Nelson Chai, a longtime banking executive who weathered the 2008 financial crisis at Bank of America, joined Uber a year ago.

In its initial public offering filing on Thursday, Uber revealed that Japan's SoftBank Group Corp. -controlled SoftBank Vision Fund was its largest shareholder with a 16 percent stake. This is up 33.8 percent from 2017, but growth slowed from 51 percent a year earlier.

Uber's earnings totaled $11.3 billion in 2018, a 42% increase from $7.9 billion in 2017.

Investment bankers had earlier told Uber it could be worth about $120 billion. Officials also possesses approximately 5 percent of Uber equal Lyft's inventory. Uber's operating loss was $3bn a year ago, while revenue slowed at $11.3bn, according to documents filed with the US Securities and Exchange Commission. Investing in these companies as they make their stock market debuts can seem a way to easy riches.

The company is likely to price their shares between the value of 48$ and 58$ per share at the very start of the public sale, in oppose to Lyft's starting price of 72$ per share.

After making the public filing, Uber will begin a series of investor presentations, called a roadshow, which Reuters has reported will start the week of April 29.

A key question facing Uber now is if it wants to keep pouring funds into its unprofitable ride-hailing business or redirect the tons of cash from its IPO into more profitable ventures such as Uber Eats food delivery startup. That will come before executives head out on a so-called road show created to drum up interest in the IPO among institutional investors who will be given the first opportunity to buy the stock before it begins trading on the New York Stock Exchange next month.

Last year, the ride-hailing giant settled a legal dispute over trade secrets with Alphabet Inc's Waymo self-driving vehicle unit. For Uber, which sees the lowest per-mile cost of operating an automobile here at 21 cents, markets like India led to an 18% decrease in its ride-sharing global average fare.

While Uber has yet to disclose the exact valuation it is seeking, it could pull off one of the largest-ever initial public offerings (IPOs) in the tech world. Analysts consider building scale crucial for Uber's business model to become profitable. TOI previously reported Uber was looking to sell its food delivery business to Swiggy here, but the talks have paused for now due to regulatory and tax complexities.

Queries are appearing into the use of duplicitous software of Uber to fool authorities regulators.

Travis Kalanick, the CEO who stepped in 2017 under stress from the board, is one of Uber shareholders, owning almost 9 percent of the firm's stock.

Uber said in its filing its ridehailing position in the United States and Canada was "significantly impacted by adverse publicity events" and that its position in many markets has been threatened by discounts from other ride-hailing companies.

Uber said its revenue has risen by more than ten-fold since 2014. The company disclosed in its S-1 filing that it now has 30 million cars on its platform in India, of a total 850 million across the world.

The rocky beginning might have prompted Uber to tamp down its IPO aspirations.

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