Uber re­ported to un­ob­tru­sively file for IPO in race with Lyft to mar­ket

Arkansas Democrat-Gazette - - National - MIKE ISAAC, KATE CONGER AND ERIN GRIF­FITH

Uber con­fi­den­tially filed pa­per­work Thurs­day to go pub­lic, ac­cord­ing to two peo­ple with knowl­edge of the mat­ter, of­fi­cially mov­ing to­ward what is ex­pected to be one of the big­gest and most an­tic­i­pated tech com­pany stock mar­ket de­buts ever.

The ride-hail­ing com­pany filed its pa­per­work with the Se­cu­ri­ties and Ex­change Com­mis­sion on the same day its ri­val Lyft also filed for an of­fer­ing, said the peo­ple, who re­quested anonymity be­cause they were not au­tho­rized to speak pub­licly. Each com­pany is rush­ing to beat the other to the pub­lic mar­kets in the first half of next year dur­ing a fair cli­mate for tech­nol­ogy IPOs and wor­ries of a po­ten­tial eco­nomic re­ces­sion.

Uber and Lyft de­clined to com­ment. The Wall Street Jour­nal re­ported ear­lier that Uber had filed its pub­lic of­fer­ing doc­u­ments.

Uber, the world’s big­gest ride-hail­ing com­pany, has been told by in­vest­ment bankers that it could be worth as much as $120 bil­lion in an IPO. At that val­u­a­tion, it would be the big­gest of­fer­ing since the Alibaba Group of China be­gan trad­ing on the New York Stock Ex­change in 2014. It would dwarf the mar­ket cap­i­tal­iza­tion of more es­tab­lished com­pa­nies such as Gold­man Sachs, putting it at around the same value as IBM or McDon­ald’s. And it likely would pro­vide enor­mous wind­falls for many of its in­vestors, founders and em­ploy­ees.

It also would be a steep jump in what pri­vate in­vestors thought Uber was worth. In Au­gust, when Toy­ota made a $500 mil­lion in­vest­ment in Uber, the com­pany was val­ued at $76 bil­lion.

Mor­gan Stan­ley and Gold­man Sachs have sub­mit­ted pro­pos­als to take Uber pub­lic. Lyft, which was last val­ued by pri­vate mar­ket in­vestors at $15 bil­lion, re­cently picked JPMor­gan Chase to lead its IPO.

Yet Uber faces a huge hur­dle as it aims to go pub­lic: It is deeply un­prof­itable. Uber said last month that it lost $1.07 bil­lion in the third quar­ter. Al­though as a pri­vately held com­pany it is not ob­li­gated to re­port its earn­ings, Uber has made a habit of do­ing so.

Uber’s chief ex­ec­u­tive, Dara Khos­row­shahi, has fo­cused on par­ing the un­prof­itable seg­ments of the com­pany’s busi­ness. He has sold off its op­er­a­tions in Rus­sia and South­east Asia, where it faced heavy com­pe­ti­tion from lo­cal ri­vals, while ex­pand­ing into po­ten­tial new busi­nesses like food de­liv­ery and bike and scooter rentals.

Wall Street in­vestors and oth­ers are still ex­pected to snap up Uber’s stock be­cause it is grow­ing quickly in a con­sol­i­dat­ing stock mar­ket with fewer IPOs. Uber’s ex­ec­u­tives have said it is prof­itable in cities where it has op­er­ated the long­est, but chooses to burn money on in­creas­ing revenue faster.

“Revenue growth is sig­nif­i­cantly more im­por­tant than wor­ry­ing about the bot­tom line at this point,” said Bar­rett Daniels, a partner at Deloitte who ad­vises on IPOs.

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