Uber IPO: Everything to know about the ride-hailing app’s listing on NYSE
Ride-hailing app Uber made its highly anticipated initial public offering (IPO) on May 10, 2019 in New York City. The company started trading on the New York Stock Exchange, trading under the symbol “UBER”, in the biggest IPO in the last five years.
Shares dropped 7.6% at the end of its first day of trading, at $42 per share after the initial pricing range between $44 and $50. Uber floated about 1.7 billion shares after the IPO, minus an extra 140 million shares in the form of low-price stock options and restricted stock units.
Why Uber launched an IPO
The company’s former CEO, Travis Kalanick tried to delay going public in a bid to clear the brand’s name amidst financial and legal battles. However, the current board believes the time was ripe for the business to launch an IPO.
According to the current CEO, Dara Khosrowshahi, Uber already has all the disadvantages of a being a public company and going public is the only way these can be minimized. He says the firm seeks to raise capital to expand the business, instead of having to borrow the money.
Eventually, this will generate publicity and boost reputation. Actually, as Khosrowshahi claims, the previous CEO Kalanick is now fully on board with his IPO plans.
Statistics from the Uber IPO paperwork
According to the paperwork the company filed with the Securities and Exchange Commission (SEC), Uber recorded about $50 billion in gross bookings and $11 billion in sales over the past year. The company claims to conduct 14 million rides a day in more than 700 cities around the world, with drivers reported to have made more than 10 billion car trips since 2012
However, the company lost about $3 billion in 2018 and has lost about $13 billion over the past three years. It also disclosed, in the latest filing, that it lost at least $1 billion in the first quarter of 2019.
Who benefits from the Uber IPO?
SoftBank Vision Fund, an investment arm of the Japanese conglomerate, will gain at least $10 billion from this public offering. Benchmark, a venture capital firm, will gain $6.8 billion; Travis Kalanick, Co-founder and former C.E.O, will gain $5.3 billion; $3.7 billion for Garrett Camp, another co-founder; $3.3 billion for Saudi Arabia’s Public Investment Fund; $3.2 billion will go to GV, formerly known as Google Ventures; and $8.8 million for the current CEO Dara Khosrowshahi.
How does an IPO work?
An IPO arises when a company opts to start selling its stocks to the public. The business is required to first take its plan to an investment bank, which assists in determining the amount of interest that can be gained from the public.
The company can then decide how many shares it wants to offer to the public, and the investment bank will guide on the initial price of the stocks based on supply and demand.
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