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Uber could raise $8.5B with downsized IPO range

Uber has officially unveiled a price range for its upcoming IPO for the first time—and the numbers aren’t quite as high as its investors once hoped.

As its IPO keeps drawing closer, Uber‘s prospective public valuation keeps getting smaller. On Friday, the ridehailing and mobility company submitted a revised S-1 filing with the SEC indicating an IPO price range of $44 to $50 per share, which would reportedly result in a fully diluted market value of between $80.5 billion and $91.5 billion. A midpoint pricing would raise nearly $8.5 billion for the business.

That’s not quite the $120 billion valuation that had been bandied about during the final weeks of 2018. It’s also below the possible range of $48 to $55 per share that Uber had previously shared with its existing investors, which could have resulted in a valuation of some $100 billion, per The Wall Street Journal.

It’s impossible to say for certain how much the two are related, but it’s notable that the dip in Uber’s expected post-IPO valuation has coincided with less-than-stellar stock performance from Lyft in the weeks after its March listing. Shares in Lyft closed Friday at $57.24 per share, a decline of more than 20% from its IPO price of $72 per share and a potential red flag for both ridehailing rivals.

“We believe that recent price reductions for both Uber and Lyft may be indicative of investor hesitance to invest in highly capital-intensive, deeply unprofitable and untested business models at this late stage of the economic cycle,” PitchBook analyst Asad Hussain said.

Uber’s latest S-1 also included news of a new investor. PayPal has agreed to purchase $500 million of the company’s common stock in a private placement at whatever IPO price Uber ultimately decides upon. The two companies first crossed paths in 2013, when Uber began accepting PayPal in its app.

Uber is now expected to begin its roadshow in earnest, with the actual IPO to follow sometime in May. Another new note from the company’s revised filing is that, when that IPO occurs, several of its existing backers plan to sell small portions of their stakes. SoftBank, which holds a 16.3% pre-IPO interest in Uber, plans to unload nearly 5.5 million shares, which would be worth a little more than $256 million at a midpoint pricing. Benchmark, TPG Capital and Lowercase Capital are among the other firms expected to downsize their stakes.

Featured image via timoph/iStock/Getty Images Plus

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    Written by Kevin Dowd

    Kevin Dowd wrote The Weekend Pitch newsletter for PitchBook, covering startups, buyouts and the rest of the private market.

    A native of the Pacific Northwest, he’s an alumnus of the University of Washington with a degree in creative writing and journalism. He enjoys books and basketball and, most especially, books about basketball. He feels uncomfortable writing about himself in the third person.

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