Daily Management Review

Uber Plans On Becoming ‘One Of The Biggest Technology IPOs Of All Time’


The chief executive of Uber will have to convince the investors for a successful investment into IPO shares.

Source: flickr.com; (CC BY 2.0)
Source: flickr.com; (CC BY 2.0)
Uber Technologies Inc revealed its decision of selling its stock worth “$10 billion” in its initial public offering, while the registration is likely to take place this week itself. With this IPO, Uber will be holding the place of “one of the biggest technology IPOs of all time”, the largest after 2014’s Alibaba Group Holding Ltd.
Uber sought for $90 billion to “$100 billion” in valuation, as it was influenced seeing the poor performance of Lyft Inc’s IPO shares. The latter is a smaller rival of Uber. However, earlier investment banks had informed Uber that the valuation could to pushed nearly to “$120 billion”. In recent valuation, Uber’s worth stood at “$76 billion in the private fundraising market”.
According to a source, most of the shares to be sold will come from the Uber while “a smaller portion” will be chased out by the investors. The company had plans of registering its IPO on Thursday with the “U.S. Securities and Exchange Commission”, while it is scheduled to start its “investor roadshow during the week of April 29”, in an attempt to align with its IPO pricing so as to start trading in the “New York Stock Exchange” by the beginning of May.
However, the sources had words of caution since market conditions could convince the company to change its plans, while the sources requested anonymity. On the other hand, Reuters reported that one of Uber representative even refused make any comments on the matter. While, Reuters added:
“Lyft’s IPO priced at the top end of its upwardly revised range last month, assigning it a valuation of more than $24 billion in an offering that raised $2.34 billion. But the stock has traded poorly since debuting on the Nasdaq on March 29, as concerns about the startup’s path to profitability have become more prominent. The shares ended trading on Tuesday at $67.44, well below their $72 IPO price”.
Uber’s consideration in “valuation expectations” strengthens the company’s realism. Uber’s operations are spread across over seventy countries which includes ride hailing operations to scooter and bike rentals, food delivery freight hauling as well as “an expensive self-driving car division”. In the IPO road-show, the C.E.O of Uber, Dara Khosrowshahi will have to convince investors about his successful venture in changing company culture and practices following “a series of embarrassing scandals” that were reported in the last two years.