Tags: uber | prices | ipo | low | end 45 dollars | share

Uber Prices Blockbuster IPO Conservatively at $45 to Raise $8.1B

uber corporate logo symbol emblem on computer pad screen

(Mohamed Ahmed Soliman | Dreamstime)

Thursday, 09 May 2019 09:26 PM

Uber Technologies Inc. priced its initial public offering on Thursday at the low end of its targeted range to value the company at $82.4 billion, hoping the conservative approach would let it avoid the market chaos suffered by rival Lyft.

Uber, the most high-profile U.S. listing since Facebook Inc. seven years ago, raised $8.1 billion, pricing its IPO at $45 per share, compared with an expected range of $44-$50 per share.

Uber’s IPO came against a backdrop of turbulent financial markets, fueled by the trade dispute between the United States and China, as well as the plunging share price of Lyft Inc, which is down 23 percent from its IPO price in late March.

Uber’s valuation is almost a third less than the valuation of up to $120 billion that its investment bankers predicted last year.

The IPO was oversubscribed, but Uber settled for a lower price to avoid a repeat of Lyft’s IPO in late March, which priced strongly then plunged in trade. Uber also wanted to accommodate big mutual funds, which unlike hedge funds put in orders for a lower price.

Lyft’s stock (LYF) slumped nearly 11 percent on Wednesday to a record closing low of $52.91, well below the $72 per share IPO price, after the ride-hailing company reported a $1.1 billion quarterly loss. Lyft shares rebounded Thursday.

Some still consider the stock overpriced.

“Uber is basically Lyft 2.0. Good model, growing sales. But, yet again, here comes California math once more. It is still losing a ton of money,” said Brian Hamilton, a tech entrepreneur and founder of data firm Sageworks. “If you buy, you are buying a bull market, not a company,” he added.

In meetings with potential investors the past two weeks, Uber’s chief executive, Dara Khosrowshahi, argued that Uber’s future was not as a ride-hailing company, but as a wide technology platform shaping logistics and transportation.

The company is hoping this pitch, coupled with any fear of missing out what is expected to be the biggest IPO of 2019, will support demand.

The IPO pricing is a balancing act for Uber’s team of underwriting banks, led by Morgan Stanley, Goldman Sachs & Co and Bank of America Merrill Lynch, to negotiate a good price while leaving some upside to ensure the stock trades up on its market debut.

Uber lost $3.03 billion in 2018 from operations, and reported a net loss attributable to the company for the first quarter of 2019 of around $1 billion on revenues of roughly $3 billion.

© 2019 Thomson/Reuters. All rights reserved.

   
1Like our page
2Share
StreetTalk
Uber Technologies Inc. priced its initial public offering on Thursday at the low end of its targeted range to raise $8.1 billion, adopting a risk-averse stance toward the most high-profile U.S. listing since Facebook Inc. seven years ago.
uber, prices, ipo, low, end 45 dollars, share
418
2019-26-09
Thursday, 09 May 2019 09:26 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved