- Uber priced its IPO at $US45 per share, the company announced on Thursday.
- This gives Uber an initial market cap of $US75.5 billion, far below the $US120 billion banks reportedly sought for Uber at the start of the IPO process.
- The company is expected to raise $US8.1 billion in the IPO, plus $US500 million in a private placement from PayPal.
- Uber is expected to start trading Friday on the New York Stock Exchange under the ticker “UBER.”
This price is at the low point of the $US44 to $US50 range previously set by the company in earlier financial documents.
The price would give Uber an initial market cap of $US75.5 billion, significantly below the $US120 billion price valuation that some of the company’s bankers reportedly sought at the beginning of the IPO process.
Overall, Uber will raise $US8.1 billion, plus $US500 million in a private placement from PayPal.
Uber is expected to start trading on Friday on the New York Stock Exchange under the ticker “UBER.”
The IPO was led by Morgan Stanley and Goldman Sachs along with 27 other banks.
The ride-hailing company, set to have the largest IPO of 2019, tempered back its price expectations as its smaller competitor Lyft struggled to maintain its own standing in the public markets. Lyft went public at the end of March with a $US21 billion valuation, and it has since sunk to a market cap of about $US15 billion.
Like Lyft, Uber faces substantial quarterly losses, even 10 years into doing business. Uber reported $US11.27 billion in revenue in calendar year 2018 and lost $US3 billion on operations during that same period.
The Wedbush analyst Dan Ives applauded the pricing strategy in a note on Thursday.
“We view Uber’s conservative pricing as a smart and prudent strategy coming out of the box as it clearly learned from its ‘little brother’ Lyft, and the experience it has gone through over the past month,” Ives wrote.
The ride-hailing sector’s pricing struggles come amid widespread success from the other tech IPOs that have hit the public markets in the first half of the year.
PagerDuty went public in mid-April with a $US1.79 billion valuation and has since shot up above $US3 billion in value.
Pinterest and Zoom, which went public one week later, have also seen widespread support from investors. Pinterest went public with a $US10 billion valuation, and it’s since shot up to about $US16 billion. Meanwhile, the video-conferencing platform Zoom went public with a $US9.2 billion valuation and is now valued at about $US20 billion.
- Read more:
- Uber estimates it lost at least $US1 billion in the first quarter of 2019
- Uber is telling the world it’s just like Amazon: Here’s why the similarities are only skin-deep
- 7 people you never realised were early investors in Uber
- Long hours, isolating loneliness, and confusing fees: Uber drivers in Washington, DC, are struggling to make ends meet
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