Uber IPO price could be set at the midpoint of its target range.
In an updated filing from last month, the ride-hailing app has its initial public offering (IPO) at $44- $50 apiece.
That suggests an $80.54 valuation on the low end of the target range on a diluted basis and a $91.51 billion on the high-end.
Meanwhile, Uber IPO price valuation at the midpoint of the target range would be around $86 billion on a fully diluted basis.
Uber IPO price drops by over 7%
Uber’s valuation faced several skepticisms amidst the poor performance of its rival Lyft during its early days on the public market in March.
Uber IPO price range has already cleared off several of the market value. These are expected to hit around $100 billion.
Uber’s S-1 revealed that the company already incurred $1.85 billion adjusted EBITDA loss for 2018. Moderation in revenue growth is also apparent with operating losses amounting to $3 billion.
According to reports, the slim margins of the company aren’t sustainable over the next 5-10 years. While its user base continued to grow, its adjusted net income has moderated. Experts also said that investors are skeptical about the company’s ability to make money anytime soon as it competes with Lyft for market share in the US.
The ride-sharing giant continues to face controversies including harassment allegations, legal battles with drivers and revolving door of C-level management.
Khosrownshanhi estimated gain from IPO
Uber CEO Dara Khosrowshahi can expect an incentive in keeping Uber’s valuation high as soon as public trading starts. The report said that if it stays more than $120 billion for 90 consecutive days, the CEO will earn net stock bonuses amounting to $100 million.
Japanese tech investing giant SoftBank has about 13% stake in the company, making it the largest investor.
Sources: CNBC, The New York Times