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$100 bn valuation? Uber steers toward blockbuster IPO as road looks rocky

Media reports said the ride-hailing giant is seeking to raise some $10 billion in what would be the largest stock offering of the year.

AFP  |  San Francisco 

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could become a $100 billion company with a massive share offering that will be a bellwether for looking toward

said the is seeking to raise some $10 billion in what would be the largest stock offering of the year.

That could result in a valuation close to USD 100 billion -- an impressive figure but below some earlier estimates amid an ebbing of enthusiasm on growth and profitability, the Journal reported.

The Journal said details of Uber's initial public offering (IPO) would be released Thursday and the market debut was expected in May.

The IPO comes after a lackluster response to last month's market debut for Lyft, the main US rival of

shares rose on the first day of trade and then lost ground. On Wednesday, shares were down more than 10 percent from the USD 72 offering price.

The Journal, citing unnamed sources, said recently provided documents showing a potential price range of between USD 48 and USD 55 a share, implying a valuation of between USD 90 billion and USD 100 billion.

These figures could change ahead of the market launch but would be below the estimated USD 120 billion suggested by some investment bankers, according to the report.

"Even a valuation in the USD 90 billion to USD 100 billion range would represent a healthy premium to the latest private valuation (some USD 76 billion) in August 2018," said of the IPO research firm

"Uber will definitely be pegged to So they can't be too aggressive on valuation, given where is trading. Though it's possible that some of the pressure on Lyft is related to investors looking to pick up Uber instead."

Analysts warn both Uber and Lyft will need strong growth to justify their lofty valuations, and face multiple challenges to their model which has disrupted traditional and relies on drivers to be independent contractors.

The ride-hailing firms are also investing in other "last mile" options such as electric bikes and scooters, and in the long run are looking to autonomous vehicles as a way to reduce dependence on private cars and reshape urban landscapes.

Uber is the latest, and will be largest of the so-called "unicorns," or venture-backed startups worth at least USD 1 billion, to look to listings to expand their capital base.

But some of the early enthusiasm about this unicorn herd has waned and there are hints that private investment rounds may have been priced too high.

Pinterest, a virtual bulletin board that connects people with interests including food, fashion, travel and lifestyle, plans to trade under the symbol PINS on the New York Stock Exchange.

unveiled its IPO price range with an estimated valuation of some USD 11 billion, below the USD 12 billion in its most recent private funding round.

Other big tech firms which could join the stampede include the collaboration startup Slack and big data firm

Aswath Damodaran, a professor specializing in corporate valuations, calculated Lyft to be worth around USD 16 billion, below its the more than USD 20 billion at its IPO price.

Uber released financial data earlier this year showing it lost USD 865 million in the fourth quarter of 2018, compared with USD 1.1 billion in the same period a year earlier.

The San Francisco-based firm reported revenue of USD 3 billion, a 25 percent increase from a year earlier.

has promised greater transparency as he seeks to restore confidence in the hit by a wave of misconduct scandals over misconduct, a toxic work atmosphere and potentially unethical competitive practices.

First Published: Thu, April 11 2019. 09:50 IST