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May 8, 2019

Find out More About Uber’s IPO

By Team Stash

Here’s what you need to know about the rideshare company.

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uber ipo

Rideshare company Uber will go public on Friday, following rival Lyft by more than a month.

The company, which allows customers to hail a ride by using an app that matches consumers with nearby drivers, is the dominant player in the ridesharing industry with about 70% of the market. It hopes to raise $10 billion in its initial public offering, according to its prospectus, or the paperwork it filed with the Securities and Exchange Commission (SEC).

Uber is also seeking a valuation of $91.5 billion, about three times that of rival Lyft, which went public on March 29, 2019. At that valuation, Uber’s IPO would be one of the largest in years, on par with e-commerce company Alibaba, and social media company Facebook, according to reports.

Its stock could range between $44 and $50 a share when it begins selling, according to experts.

Here are some more highlights from Uber’s IPO paperwork:

reported revenue for 2018
reported operational losses in 2018
  • Uber reported revenue of $11 billion for 2018, an increase of more than 40% compared to 2017.
  • Uber lost $1.8 billion in 2018, and it has reported operational losses of more than $13 billion since 2015.
car rides a day in 700+ cities worldwide
completed trips since 2012
  • Uber claims to conduct 14 million rides a day in more than 700 cities around the world.
  • Uber drivers have made more than 10 billion car trips since the company launched in 2012.

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Plenty of questions

  • Uber listed in its summary of risk factors that expenses for operations were expected to increase considerably in the future, and that the company may never make a profit.
  • Uber may price its shares at the low end of the spectrum, according to some analysts. By contrast, its rival Lyft had priced its IPO shares at the high end, only to see the stock price fall in recent weeks.
  • Uber drivers in the U.K. and the U.S. are planning strikes, to push for better working conditions, including better wages and more regulated fares, according to reports.

More about IPOs

Following an IPO, a new stock can be subject to significant increases or decreases in market price. That’s known as volatility. Stock volatility can be particularly high in the first few months following an IPO and as a result, so can the potential for short-term losses. If you’re in this stock for the long haul though, it could be an opportunity for dollar cost averaging.

Oftentimes, fluctuations in price are due to the expiration of something called a lockup period—this is when company insiders, such as employees, sign an agreement that prohibits them from selling shares for a specified period of time. (According to Uber’s prospectus, the company’s lockup period is 180 days.)

When lockup periods expire, insiders tend to sell their stock in order to realize profit, sometimes causing the stock price to fall, or experience large changes in price in the process. You can find out more about the lockup period and other information about Uber by looking at its prospectus, a publicly available document on the Securities and Exchange Commission’s website EDGAR.

Remember the Stash Way—invest for the long-term, invest regularly, and don’t put all of your eggs in one basket.

More about Uber

Uber, was founded by Travis Kalanick and Garrett Camp in 2009. It started out as UberCab in San Francisco, and then quickly moved on to other cities and countries, dropping “Cab” from its name in the process.

Over the years, the company has raised more than $24 billion in 22 rounds from venture capitalists.

According to Uber’s prospectus, the company has expanded beyond ridesharing to develop additional businesses in bike sharing, scooter sharing, meal delivery, and freight logistics.

Uber’s growth has often been controversial, with problems related to background checks for its drivers, and pushback from metropolitan areas worried that Uber could be destroying the traditional taxi and black car businesses in those locales.

Big questions have also arisen about whether Uber fostered a culture of sexual harassment against women, according to reports.

Kalanick was forced to step down from the company in 2017.  Dara Khosrowshahi replaced him as chief executive officer.


Written by

Team Stash


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