What you need to know about Uber's landmark IPO

May 9 2019, 10:45 am

Update: Uber has listed its stock price at $45 per share, giving the company a valuation around $82 billion. The company raised $8.1 billion from the IPO.

Get ready to see the ticker (UBER) on the New York Stock Exchange (NYSE).

As of this Friday, May 10, the ride-hailing service is going public, allowing anyone to buy and sell shares. Uber is set to list its price Thursday, a move that will officially transition it from a privately-held to a publicly-traded company, by placing its shares somewhere in the $44 to $50 range. This price range has been lowered from early estimates that put the IPO between $48 to $55 per share.

Overall, Uber’s valuation is expected to hit as high as $91.5 billion.

It’s a landmark IPO, from which Uber’s hoping to raise $9 billion, but it also comes with a lot of unrest from its gig workers, aka drivers. On Wednesday, Uber (and Lyft) drivers around the globe took part in a 24-hour protest demanding better working conditions and higher wages. Uber drivers in Montreal are pushing for a $18/hour wage, or $16 with expenses covered, and the city’s 25,000-some drivers were in solidarity with their fellow drivers in cities such as New York, Los Angeles, London, and Melbourne.

This strike also comes on the heels of news around Uber’s not-so-great first quarter — it lost at least $1 billion and has yet to be profitable. But the “unicorn” (a term that refers to any privately held startup valued at over $1 billion) doesn’t seem to be phased. And when there are businesses like PayPal (PYPL) reportedly investing $500 million, there’s a lot at stake for the soon-to-be NYSE-listed company.

Along with PayPal come a number of venture firms and people that have a stake in Uber’s impending IPO. Some were early-stage investors, some have come on board as the brand boomed worldwide, but all are counting on a strong showing tomorrow and a consistency that will reap returns. It doesn’t want to follow in Lyft’s footsteps, which opened just north of $87 and closed its first day just over $78. Yesterday, Lyft (LYFT) closed at $52.91. Since its IPO on March 29, Lyft has seen a $1.1 billion loss in Q1 2019. But, it is still generating revenue.

Uber is set to be one of the biggest IPOs ever. In fact, it’s the biggest IPO since China’s The Alibaba Group went public in 2014. Alibaba’s current market cap is $475 billion.

As for investors, Softbank invested over $7 billion in 2017 through its Vision Fund. It has a 16.3% stake in Uber, making it the largest shareholder, according to CNN Money. Softbank’s CEO Masa Son has used the $100 billion fund to invest in other companies like WeWork and Slack Technologies Inc., too.

Other notable Uber backers/round investors/early stakeholders include:

  • First Round Capital
  • Benchmark
  • Lowercase Capital
  • Garrett Camp
  • Menlo Ventures
  • Fidelity Investments
  • Toyota Motor Corp.
  • DENSO
  • Jeff Bezos
  • Saudi Arabia’s Public Investment Fund
  • Alphabet
  • Jay-Z
  • Ashton Kutcher
  • Gwyneth Paltrow

Key things to note

  • Dara Khosrowshahi, formerly the CEO of Expedia, assumed the role of Uber’s CEO on September 5, 2017, when the company was eight years old. He took over from Uber’s embattled co-founder Travis Kalanick, who resigned in June 2017 following a slew of missteps and a strong push from investors to leave.
  • Uber’s revenue in 2018 totalled $11.3 billion, by comparison, Lyft’s filings state revenue reached $2.2 billion.
  • Over the past three years Uber has seen $10 billion in total losses, with a reported loss of $1.8 billion in 2018.
  • Uber has 91 million active monthly users.
  • A recent study out of Stanford University claims Uber drivers make, on average, $21 an hour. The majority of its workers are part-time.
  • Uber had once forecast its IPO to debut at over $100 billion, but following Lyft’s debut, it lowered the figure. Again, Uber’s valuation (at the high end) is $91.5 billion and at the lower end, $80 billion.
  • Uber has positioned itself as more than just a ride-sharing service in an attempt to differentiate itself from Lyft. Uber Eats is a major selling factor. Uber also runs with the lure of other services like flying taxis. And Uber operates in 60 countries whereas competitor Lyft only operates in North America.
  • Uber often refers to its story in a similar vein to Amazon and hopes to ride that narrative, because “look where Amazon is now” right?
  • Uber could (and most likely will) be the biggest IPO of 2019. But how valuable are tech stocks these days? Snap (SNAP) was the biggest IPO of 2017 and has since lost more than $20 billion in value, and platforms like Facebook (FB) are seeing users fleeing, but Uber does have more skin in the game and can use its add-on ventures to poise a better outcome. Uber is not Facebook.
  • Other big-time IPOs of the past include Alibaba ($21.8 billion in 2014) Visa ($17.9 billion in 2008), GM ($15.8 billion in 2010) and Facebook ($16 billion in 2012).
  • Uber is the most high-profile IPO since Facebook went public seven years ago.
  • Uber’s IPO is expected to be the eighth biggest debut in US history, according to findings from Axios.
  • Uber joins a herd of tech companies that have recently entered the public market including Lyft (LYFT), Pinterest (PINS) and Zoom (ZOOM). While Airbnb and WeWork are among the companies slated to pivot to public later this year.

We won’t know where the numbers will land for Uber Technologies Inc. until Friday, but Uber will list its stock price later today.