UPDATED 22:57 EDT / APRIL 25 2019


Report: Uber to reveal details of IPO, expected on a valuation of $80-90B

Uber Technologies Inc. finally could reveal details of its forthcoming initial public offering Friday, with reports suggesting that it will price its shares at between $44 and $50 each.

Bloomberg, citing people familiar with the matter, said the offering will value Uber at between $80 billion and $90 billion, with Uber raising between $8 billion and $10 billion in the IPO. The numbers are slightly down from previous reports that had Uber going public at between $90 billion and $100 billion.

Unsurprisingly, the lower figure is believed to be a reflection on what has happened with the share price of Uber rival Lyft Inc. since it went public March 28. Although it initially popped, there was little joy for investors as shares in Lyft dropped below the initial price of $72 a share on its second day of trading. It has yet to recover, prompting shareholders to file a lawsuit against the company April 18.

As of the close of trading today, Lyft shares were priced at $56.34, down 22%. Uber will be looking to avoid a similar performance when it goes public sometime next month.

The valuation on Uber is notable because it values the company higher than a long list of prominent established U.S. companies. At $90 billion, Uber will have a valuation that places it higher than DowDuPont Inc., General Electric Co., Caterpillar Inc., Morgan Stanley and BlackRock Inc., according to CNBC.

It hasn’t all been doom and gloom for large tech companies going public. Pinterest Inc. and Zoom Technologies Inc. both popped on debut April 17 and unlike Lyft have stayed above their debut price ever since. Shares in Pinterest were priced at $28.80 at the close of trading Thursday, up 52% from an IPO price of $19 per share. Zoom closed the day at $65 per share, up 81% from its float price of $36 per share.

Uber enters its IPO not only with a headline-grabbing valuation but also significant losses. Uber reported $11.27 billion in revenue for 2018, up 42% from 2017. Technically, Uber booked a profit of $1 billion in 2018, an improvement of a loss of $2.6 billion in 2017, but only because of the sale of its businesses in Southeast Asia and Russia. Excluding them, Uber would have lost about $3 billion.

Photo: Pixabay

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