Vanguard joins funds in cutting Uber value

Vanguard Group and T. Rowe Price Group Inc. marked down the value of their shares of Uber Technologies Inc. by as much as 15 per cent following a drumbeat of bad news, lawsuits and boardroom battles at the ride-hailing company.

Vanguard cut the worth of the shares by 15 per cent to US$41.46 as of June 30 from the prior quarter, according to filings. T. Rowe Price reduced its valuation by about 12 per cent to US$42.70. BlackRock Inc., the world’s largest asset manager, shaved its estimate less than 1 per cent to US$53.88 as of June 30 from two months earlier.

Uber’s former chief executive Travis Kalanick was ousted in June amid concerns that he had fostered a hostile workplace culture. Uber also faces a lawsuit from Alphabet Inc.’s Waymo unit, which accuses the firm of misappropriating driverless trade secrets. Uber has denied wrongdoing.

The struggles at Uber, which has been burning through cash, have reached the boardroom. Venture capital firm Benchmark, Uber’s largest shareholder, is suing Kalanick, challenging his control of board seats.

The Wall Street Journal reported on the price cuts Wednesday. The Journal also said that the Principal Financial Group Inc.’s mutual funds and Hartford Financial Services Group Inc.’s fund business also reduced price estimates for Uber by 15 per cent.

Mutual funds that hold Uber shares must estimate their value each quarter because they don’t trade publicly. Fidelity Investments didn’t change its valuation of Uber as of June 30 from the prior quarter, according to a filing today.

The companies either declined to comment or didn’t respond to requests for comment.

Uber has held up its US$69billion valuation as a sign to employees, partners and prospective competitors that it is a once-in-ageneration company. Any evidence Uber might be less valuable than it appears may make it harder for it to scare off new competitors.