Uber, the ride-sharing app that operates across multiple countries and is largely considered the market leader in the ever-growing industry, has estimated its initial stock market value of $90bn in new reports published recently.
Latest Unicorn IPO
The much-anticipated flotation of this ‘unicorn’ company has already begun attracting investor buzz, though some insiders remain dubious about the enormous figure that Uber has produced.
With fellow unicorn company Pinterest announcing its valuation at just $12.6bn, investors are quite rightly concerned with whether these predictions will come to fruition when Uber finally floats.
The taxi-firm, which boasts approximately 91m users worldwide, plans to sell shares in the company for anywhere between $44 and $50 per share. Alongside this, the firm’s partners have agreed to sell $500m worth of shares to Silicon Valley giant PayPal, giving them a significant stake within the company.
Uber hopes to generate around $10bn through this share issue, which would flush the company with some much-needed cash.
It was announced earlier this week that Uber has anticipated never making a profit at all as their business model prevented high levels of profit return in the long-term.
In the first three months of 2019 alone, Uber had a net loss of approximately $1bn, despite 1.5bn people taking rides with their company.
Investor Concern
However, traders are growing increasingly wary of investing in Uber. Lyft, the company’s direct competitor, floated earlier in the month and despite a strong start, have seen their share price drop around 20% below the initial investor price.
Key figures behind the floatation- who have already privately sold 27 million shares internally, are hoping to avoid the precedent set by their competitor and ensure a strong selling of the 180m shares in the first few days of trading.
Uber executives will now spend the next ten days attempting to market shares to high-risk investors, though time will only tell if they see Uber as an advantageous buy- or a disaster waiting to happen.
Uber, which was founded in 2009, is part of a number of high-risk, low-return companies based out of Silicon Valley who are turning to the stock market for funds, including Pinterest, Lyft and Airbnb.