Published: Sun, April 14, 2019
Finance | By Kristine Clayton

Uber plans to sell around $10 billion worth of stock in IPO

Uber plans to sell around $10 billion worth of stock in IPO

Multiple advanced degrees might be needed to figure the company out.

"We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability", the company said in the "S-1" form or the IPO Prospectus submitted to the Securities and Exchanges Commission.

And Uber does require twice as many (digital) pages to explain itself.

Uber set a placeholder amount of $1 billion but did not specify the size of the IPO.

Uber CEO Dara Khosrowshahi acknowledged the self-inflicted wounds that damaged the ride-hailing service's reputation while trying to make the case that the company has rehabilitated itself since he took over 18 months ago.

For the Uber optimists, there was plenty to like. It said its revenue previous year rose 42 per cent to reach $US11.3 billion ($NZ16.8b), and it achieved a $US1b profit, derived from selling some of its overseas businesses. This is not a hypergrowth company anymore, at least not in its biggest business of rides on-demand.

Kalanick is one of Uber's largest shareholders, owning almost 9% of the company's stock.

Lyft lost $950 million in 2018 on the same basis.

One advantage Uber will likely seek to play up to investors is that it is the largest player in numerous markets in which it operates.

Uber's filings also noted that its insurance reserves totaled US$2.94 billion at the end of 2018, up from US$2.0 billion at the end of 2017.

The overall message: Uber is complex.

"I'm sure that the Lyft debut is going to affect both Uber and Pinterest", Hamilton added. But that stake had fallen to about 15.4% of the company as of the end of September past year, according to Uber's prospectus.

Revenue growth also slowed. The company has expanded beyond its original ride-hailing mission and is experimenting with scooters, bike-sharing and other alternative forms of transportation.

- Alphabet, Google's parent company, owns 5.2%. It has spent more than $1 billion developing a driverless vehicle operation. It posted revenues of $11.27 million in 2017 according to the filing. It also revealed invaluable information about Uber's past operations.

The company is on track to price its IPO and begin trading on the New York Stock Exchange in early May.

The idea is to show that Uber is not a collection of semi-related services like Tyco or other old industrial conglomerates, but a company whose many parts contribute to a greater whole.

The big valuation in Uber's IPO papers comes after a 2018 valuation of the company that placed it at $76 billion on the private markets when Toyota invested, reported Bloomberg.

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