Uber (May 10) IPO – What Should we expect from 2019’s largest IPO

It is no news that Uber will be available to be purchased by the general public in May. Following Lyft’s IPO and under-performance, Uber’s upcoming IPO poses an interesting experience that most investors are sure to be fully engaged in. In this article, I will be discussing the previous funding rounds and valuation of the transportation network company, “Uber”.
Shares of Uber can be purchased on
M1 Finance for free. You can read my review of M1 Finance.
Founded in 2009 by co-founders Travis Kalanick and Garett Camp, Uber currently operates in over 785 cities worldwide and is headquartered in San Francisco. Lyft, its biggest rival, is ironically also headquartered in the same city. Uber serves primarily as a ride sharing company with recent additional growth areas in the food delivery service business (Uber Eats), bike rental service (Uber Bike), and freight service business (Uber Freight) as well as Uber Elevate and a self-driving car segment. These additional growth engines and global diversification are what differentiates Uber from Lyft. These engines should serve Uber well in the future as it aims to become a company with a wide moat that can generate significant cash flow for its shareholders.
In 2017, Uber went through a major shake-up due to PR events which led to its founder and CEO at the time being asked to step down and was ultimately replaced with a new CEO. The company has however, re-invented itself and is poised to become 2019’s largest IPO so far. Uber has a price set between $44 to $50 per share for its IPO which would place its market cap as high as $84 billion. The company plans to raise $10 billion for its IPO. Looking back at the company’s previous financing rounds, Uber has come a long way and has raised billions from institutional investors over the years. The major investors in Uber have been SB Cayman 2 Ltd, Benchmark Capital Partners, Expa-1 LLC, The Public Investment Fund, Alphabet Inc (Google), Softbank, and the Saudi Arabian Government.
Uber released its full year 2018 financials and the company raked in a revenue of $11.43 billion, this represents a 43 percent increase YoY. Adjusted losses decreased by 15% to $1.8 billion from $2.2 billion. Including its sale of its Russian and SouthEast Asian businesses, its 2018 GAAP losses actually came out to be $370 million compared to its GAAP losses of $4.5 billion in 2017. Uber’s yearly growth has relatively slowed down compared to previous years, however, the question remains when will it become profitable. Similar to Amazon, it might take a little bit of time and investors will have to be patient for this fully servicing transportation and logistics company. I will personally be adding Uber to my portfolio because they are establishing a wide moat in large and diverse untapped markets. The company will IPO on May 10th on the New York Stock Exchange.

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