Uber aims for stock market debut value of more than 90bn

first_imgnews This article is more than 2 months old Share via Email Target valuation would be largest float for US tech company since Facebook in 2012 Business Today: sign up for a morning shot of financial news Rob Davies and Mark Sweney This article is more than 2 months old First published on Fri 26 Apr 2019 04.34 EDT Share on LinkedIn Uber Share via Email Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk Current shareholders include the Vision Fund, a $100bn investment vehicle managed by Japan’s SoftBank and heavily backed by Saudi Arabia. It owns 16.3% of Uber, while Saudi Arabia’s oil-backed sovereign wealth fund owns a separate 5.3% stake. Both investors are expected to make billions from a successful float.The valuation Uber is hoping to achieve is almost a third less than the $120bn investment bankers believed the company could be worth last year. Uber’s more modest expectations follow the underwhelming performance of its smaller rival Lyft, whose share price has fallen by a fifth after its initial public offering last month.Uber is also using the float to salve often fractious relations with drivers by offering more than a million of them almost $600m in sweeteners.In December, UK drivers won a landmark employment tribunal ruling to be classified as workers, rather than self-employed, with access to the minimum wage and paid holidays. The chief executive, Dara Khosrowshahi, admitted that as a public company Uber would need to maintain an exceptional corporate record. “Taking this step means that we have even greater responsibilities, to our shareholders, our customers, and our colleagues,” he said in a letter accompanying the Securities and Exchange Commission filing on Friday. “In getting from point A to point B, we didn’t get everything right. Some of the attributes that made Uber a wildly successful startup … led to missteps along the way.” Fri 26 Apr 2019 14.06 EDT Support The Guardian The stock market valuation Uber is hoping to achieve could raise proceeds of $8bn to $10bn.Photograph: Phil Noble/Reuters Uber Share on Facebook Share on Pinterestcenter_img … we have a small favour to ask. The Guardian will engage with the most critical issues of our time – from the escalating climate catastrophe to widespread inequality to the influence of big tech on our lives. At a time when factual information is a necessity, we believe that each of us, around the world, deserves access to accurate reporting with integrity at its heart.More people are reading and supporting The Guardian’s independent, investigative journalism than ever before. And unlike many news organisations, we have chosen an approach that allows us to keep our journalism accessible to all, regardless of where they live or what they can afford. But we need your ongoing support to keep working as we do.Our editorial independence means we set our own agenda and voice our own opinions. Guardian journalism is free from commercial and political bias and not influenced by billionaire owners or shareholders. This means we can give a voice to those less heard, explore where others turn away, and rigorously challenge those in power.We need your support to keep delivering quality journalism, to maintain our openness and to protect our precious independence. Every reader contribution, big or small, is so valuable. Support The Guardian from as little as $1 – and it only takes a minute. Thank you. Khosrowshahi was brought in as Uber’s chief executive after it went through a series of scandals including concerns over passenger safety and the behaviour of Travis Kalanick, Uber’s founder and former boss. Kalanick’s stake will be valued at nearly $8bn if the company hits its target valuation.In 2017, Uber was stripped of its London licence after it was deemed not to be a “fit and proper” private car hire operator. At the time, Khosrowshahi said that “the truth is, there is a high cost to a bad reputation”. Uber was given a 15-month probationary licence after convincing a court in its appeal that it had cleaned up its act.Uber: the highs and lowsSince its launch in San Francisco in 2010, Uber has expanded to more than 700 cities, from Abilene (Texas) and Abuja (Nigeria) to Volta Redonda (Brazil) and Zurich (Switzerland).Uber recorded sales of $11.4bn (£8.8bn) in 2018, but lost $1.8bn. The previous year it lost $2.2bn. Executives warned that expenses were set to “increase significantly in the foreseeable future”.More than 91 million people used the app last year to hail rides or order food. Uber has been involved in several controversies, including allegations against its drivers of sexual assault, a major data breach, and the use of illicit software to evade authorities.While its often cheaper fares have been welcomed in most cities, its app is banned in Denmark, Bulgaria and China.The company was fined £385,000 last year by the Information Commissioner’s Office for a data breach that affected 3 million British users.The IPO will deliver huge fortunes to Uber’s founders, Travis Kalanick and Garrett Camp, who own 8.6% and 6% of the shares respectively.The biggest shareholder is the Japanese billionaire Masayoshi Son’s investment fund Softbank, which owns more than 16% of the firm. Uber recently bought the electric bike company Jump Bikes for $200m.It recently launched Uber Freight, which matches shipping companies with truck drivers in a similar way to that by which the original app links passengers and taxi drivers.The company is developing self-driving and flying cars. Share on Twitter Since you’re here… Uber has unveiled the terms of a hotly anticipated stock market float which it hopes will value the ride-hailing service at more than $91bn (£70bn).While the target is $10bn less than some bankers suggested the 10-year-old firm might be worth, the valuation is more than double the value of the 116-year-old carmaker Ford and would be the largest float by a US tech company since Facebook’s in 2012.Its Wall Street debut will gauge investors’ excitement about the prospects of a company that has expanded rapidly from taxi services into food delivery and is now investing billions in developing driverless cars. If it hits the mark, Uber will raise around $9bn in new funds and some early investors will make big profits.Despite the scale of ts ambition, Uber lost $1.8bn last year even while its revenues surged by more than 40% to $11.3bn. The business has never made a profit, and said recently that it may never do so. Figures released alongside its float plans showed it lost a further $1bn in the first three months of this year.But its data-packed float prospectus revealed the sprawling scale of its operations in 700 cities. Between taxi and food delivery services, the San Francisco-based firm boasted 91 million users a month by the end of 2018. Users of its vehicles travelled 26bn miles last year, summoning an army of 3.9 million drivers.Those drivers have earned $78.2bn between them since 2015 – and $1.2bn in tips since Uber gave users the option to add a gratuity in mid-2017.The firm has set a target price range of $44-$50 per share and will sell 180m shares to raise up to $9bn. A further 27m shares will be sold by existing investors for up to $1.35bn. Dow Jones Reuse this content Share on Messenger Topics Shares3333 Share on Facebook IPOs Stock markets Share on Twitter Share on WhatsApp Read more Uber aims for stock market debut value of more than $90bnlast_img read more