Uber All Set to Hit the Road for IPO After a Bumpy Journey
Uber cabs had made its first appearance nine years back and in these years the startup has grown from an upstart looking to surmount the taxi cab chain. It has been an idol choice that has the grip in every form of transportation and logistics services it can think of. In the process, Uber has taken a few steps that might give a pause to the shareholders but hold the status for the highest valued tech IPO since Facebook and Alibaba after Uber finally went public.
A Brief About Uber’s Valuation
Just a year back the expectations was that Uber will be going public at a massive $120 billion which is almost double the company’s valuation in the fundraising round from August 2018, which would have made the ride-hailing company more valuable than General Motors, Chrysler and Ford all three combined. But there was a slip due to the demand for Uber IPO after which Uber revealed to price its initial public offering between $44 and $50 per share, and was later settled on a low end of $45. In this price, the company will be valued at about $75.46 billion, which still makes it a high-end company ever to go public.
But there was still a drop of 38 percent due to its rival Lyft ever since it went public in late March. This resulted in a drastic fall of stocks. Therefore Uber had loss somewhere around $800 million a quarter which was larger than Lyft. but on the other hand, the company’s pricing did reflect a relatively conservative approach for the initial public offering. And as it is the largest U.S. IPO since Alibaba’s record-setting IPO back in 2014. Uber who has never turned a profit showed an $81.1 billion raise in IPO.
Uber Is Public Now
Uber going public is something that will not result in some influx of billions into the bank accounts as Uber IPO will likely mean more expensive rides in the near future. The question might arise that with the war between Lyft the prices should be cheaper. Perhaps Uber will be seen slashing prices to poach rides from Lyft but in few markets only which are not likely to last very long as both the companies are public now and will be facing pressure from big investors and shareholders. But the prospective investors in Uber IPO did show huge interest near the bottom of the range.
There are other pressures for Uber. Many drivers went on a strike in the effort to highlight poor pay and unsatisfactory working conditions. The main argue point was that Uber’s business model enriches the company’s executives at the expense of low-paid drivers which made them not eligible for the benefits of full- time employment. This was the reason Uber took a step to hit the road for IPO.
Many analysts who feel optimistic about Uber’s future can take comfort from the example of another tech giant, Facebook. Its practices did violate user privacy and raised alarms over monopoly power but after the expected pay of multi-billion -dollar fine to regulators, the stock jumped more than 7% which indicated that the fine was not a real threat for the investor.
Similarly, Uber has a history that is relatable. It did openly ignore municipal laws for taxi cabs. Still, it is considered that building scale crucial for Uber’s business model will become profitable.