Uber close to becoming a public company but warns they may never achieve profitability
Ride-hailing app Uber are pushing ever closer - to what is expected to be the largest initial public offering (IPO) of the year - to a reported $100bn valuation, but have warned it may never "achieve profitability."
The 10-year-old company that has caused controversy within the global taxi and private hire industry will become the latest private company worth over $1bn to test the stock markets appetite for "loss-making" tech companies.
Uber reported 2018 revenues of $11.27bn for 2018 and a loss of $1.85bn in a filing with the Securities and Exchange Commission. As highlighted in a report by The Guardian, the tech giants are reportedly aiming for a valuation of close to $100bn, which may seem a ridiculous amount of money, but would still be worth less than the $120bn estimated value its bankers had attached to the company last year.
And they don't expect profits to be showing any time soon, warning: “We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability.”
In the filing, Uber highlighted a series of warnings about potential issues which could harm them as they look to become a public company. Uber has faced many issues with regulators around the world and has been involved in numerous lawsuits related to attacks on passengers.
It has also had to deal with driver backlash over pay cuts and turmoil within the boardroom.
Uber warned that maintaining its brand and reputation is “critical to our business prospects” and that failure to address the negative publicity it has received “ critical to our business prospects.”
Uber is following closely behind it's main US rival Lyft into the world of public shares. Lyft went public two weeks ago and has faced a turbulent ride so far as it struggles to maintain its initial valuation. Its stock was initially priced at $72, but now stands at around $60.
Image: Source; Flickr
Author; Ecole PolyTechnique