Uber may not reach $100 billion valuation with target share price of $44-$50 for IPO

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Published: April 26, 2019 5:44 PM

The company has also disclosed $1 billion loss and revenues of roughly $3 billion in its first quarter of 2019, in the regulatory filing.

uber, uber india, technologyRepresentational Image

American ride sharing giant Uber has revealed its share prices today which are targeted at $44-$50 for its IPO. With this, the company’s expected valuation has reduced to $91 billion from the previous expected sweet spot of over $100 billion, Bloomberg reported. Travis Kalanick’s co-founded Uber looks to sell stocks worth $10.35 billion with its initial public offering. The company is expected to release the official terms of IPO early tomorrow.

With the offering, the company is eyeing to sell 180 million shares with a further 27 million sold by insiders Uber said in its regulatory filing.

The company has also disclosed $1 billion loss and revenues of roughly $3 billion in its first quarter of 2019, in the regulatory filing.

Uber had also announced the possibility of its losses in the future with the release of draft papers of IPO early in April. The company’s disclosure is a part of the dual strategy as it will help bring stability to the investor base, Eric Schiffer, CEO of the US-based Patriarch Organization had earlier told Financial Express Online. Explaining further, he said that this will attract investors who look 1-3 years out and weeding out those who are not in line with this vision.

The Lyft factor

Lyft, Uber’s major rival in America had a role to play in Uber’s IPO pricing. Lyft had opened its IPO in March 2019, with price per share at $72, higher than the expected price range of $62-$68. Uber, on the other has shared the target price of $44-$50, much lower than Lyft’s price. Since Lyft IPO had received flat response, the company might have had a reason to shy away from high pricing as it learnt a lesson from the rival IPO. “They have learned from the Lyft valuation debacle and priced the IPO conservatively,” Eric Schiffer had told Financial Express earlier.

Uber IPO is seen as a bellwether in tech startups if it does well; it being the biggest public issue of the year and among the ten biggest offerings of all time.

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