Investment

Uber seeks to raise $10 billion in year's biggest IPO

Uber/Bloomberg

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The global ride-hailing company will kick off a road show to market shares to potential investors this month and would begin trading publicly in May.

Wednesday 10, April 2019

(Bloomberg) -- Uber is expecting to raise about $10 billion when it will go public in an offering which is likely to be the largest US initial public offering (IPO) this year and among the 10 largest of all time.

Investors could get their first look at hundreds of pages of detailed information about Uber Technologies this week, as the ride-hailing giant gears up to publicly file for an IPO.

While Uber has released partial financial results for years, its IPO filing with the US Securities and Exchange Commission will provide the first complete look at its numbers and operations.

Prospective investors are hungry for the details, and they’re now armed with ride-hailing rival Lyft’s March listing as a reference point for picking apart Uber’s business and value.

In February, the ride-hailing firm said that it generated $50 billion in gross bookings last year, a 45 per cent increase from 2017. Of the $11.4 billion of net revenue in 2018, only $3 billion came in the last three months of the year, up only two per cent from the previous quarter.

Investors will want an explanation for Uber’s flattening trajectory, a possible signal that its core ride-hailing business may be stalling. They’ll also want to know where the money is coming from as the company expands into food and freight delivery and scooters and bicycles, as it also eyes driverless and even flying vehicles.

Breaking out Uber’s US ride-hailing business from its global operations will be a particular focus for those parsing its IPO to compare it to Lyft, which operates in the US and Canada. A key point of inquiry will be whether Uber has already saturated the US market.

The ride-hailing business is years ahead of food delivery, so prospective investors will likely be less forgiving of losses in the former than the latter.

Uber was last valued at $76 billion on the private markets when Toyota invested in 2018. Last year, bankers jockeying to lead the offering told Uber it could be valued at as much as $120 billion in an IPO.

The offering, planned for the New York Stock Exchange (NYSE), will be led by Morgan Stanley as well as banks including Goldman Sachs Group and Bank of America.

 

TAGS : Uber Technologies , Lyft, IPO, NYSE, Morgan Stanley, BofA, Goldman Sachs

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