Uber dials back expectations as its preps for massive IPO
Ride-hailing giant Uber seems to be underpromising in hopes of overdelivering when it goes public as early as next month. The company said in a regulatory filing it plans to sell 180 million shares in the initial stock offering for between $44 and $50 apiece. That values the company at $80 billion to $90 billion, lower than previous estimates of as high as $120 billion.
Uber also disclosed that PayPal, the eBay-owned online payment service, has agreed to buy $500 million in stock when the company goes public.
One factor that may have spurred Uber to ratchet back expectations -- a rocky first month for rival Lyft after it went public last month. Before the start of trade on Friday, Lyft shares were down 28 percent from their March 29 opening price of $72.
Uber gave potential investors a first look at its finances this month, revealing nearly $8 billion in losses over a decade. But it also showed impressive growth. Revenue from its core ridesharing business grew from $3.5 billion in 2016 to $9.2 billion in 2018, according to its filing. Gross bookings over that period more than doubled to $41.5 billion.
The company also sees potential for much more growth. As of the end of 2018, only 2% of people in the 63 countries where Uber operates used its services, Uber said.
For now, Uber continues to bleed cash. It lost roughly $1 billion in the first quarter of 2019 on revenue of about $3 billion.
