Uber IPO could be valued a third below initial valuation

It has been revealed by Reuters that Ubers IPO could be valued as low as a third of its initial valuation.

Ubers IPO valuation is estimated to be between $80.5 and $91.5 billion, which is significantly less that the $120 billion that investment bankers told Uber that they could fetch a year ago.

It is believed that Ubers valuation has been affected by Lyfts poor stock performance following its IPO laumch in March 2019.

When Lyft launched their IPO, they were valued at $24.3 billion, this was 11 times last years revenue, meanwhile Ubers valuation is approximately 8 times 2018's revenue.

The filing will see Uber set the target price of $44 to $50 per share for its IPO. The company will sell 180 million shares in the offering, raising approximately $9 billion, with a further 27 million sold by existing investors, gleaning around $1.35 billion. 

Uber expects to price the IPO on May 9 and begin trading on the Stock Exchange om May 10.

Uber co-founders Travis Kalanick and Garrett Camp could glean $343 million, as they put on offer just over 6.8 million shares. 

Some of the questions Uber may have to face from potential investors will no doubt include how they will cope transitioning to autonomous vehicles as well as when the company may turn a profit. Uber reported a net loss for the first quarter of 2019 of around $1 billion on sales of roughly $3 billion. Uber have however said that PayPal had agreed to purchase $500 million of stock in a private placement at the price at which the IPO eventually settles. 

Uber begins a 10 day investor road show, during which Uber Chief Executive Dara Khosrowshahi will also be charged with the task of convincing investors that he has successfully changed the company's culture and business practices.  

Image Source: Flickr

Image Author: Elliott Brown