Uber’s IPO – What It Holds?
On Thursday, Uber priced its IPO at the low end of its targeted range for a valuation of $82.4 billion. Experts say that the result was underwhelming for the much awaited IPO since Facebook’s market debut seven years ago.
However, this is a red letter day for startups, as Uber has grown up to be the world’s largest ride-hailing company since its inception. This is considered to be the year’s biggest IPO that came amid turbulent financial markets.
Uber’s IPO Valuation
Industry experts say that Uber’s valuation is almost a third less than what its investment bankers predicted last year, but still above its recent valuation of $76 billion in the private fundraising market.
Experts say that the IPO was oversubscribed, but Uber settled for a lower price, to avoid a repeat of Lyft’s IPO in late March. Uber wanted to include big mutual funds too. “Ultimately, the success of Lyft’s and Uber IPO’s offerings will be judged based on post-IPO performance and how these companies can sustain their growth, while moving toward profitability and lowering their cash burn,” said Alex Castelli, managing partner at advisory firm CohnReznick.
“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.
The CEO Speaks
Uber CEO Dara Khosrowshahi opined that Uber’s future was not only a ride hailing company, but maybe a wide technology platform that shapes logistics and transportation.
With excerpts from Reuters