Uber Expected To Price IPO In Mid Or Low Range

Uber will price its initial public offering (IPO) at either the middle of its target range or below, according to a report by CNBC.

The price range set up by Uber in an updated filing in April was $44 to $50 a share. This would mean Uber’s valuation on the low end of the range would be $80.53 billion and $91.51 billion on the high end. On a fully diluted basis, the midpoint would be an estimated $86 billion.  

Many analysts remain skeptical about Uber’s high valuation, especially since rival Lyft has performed so poorly after its IPO.

Uber’s updated price range was already less than what many thought it would be, and it sheared off some of its expected market value, which some analysts expected to be as high as $100 billion. Uber’s S-1 filing showed an adjusted ebitda loss of $1.85 billion last year, and also highlighted slowing revenue growth.

The ride-hailing giant is expected to price its shares on Thursday (May 9) and begin trading on Friday.

The CEO of the company, Dara Khosrowshahi, has a strong incentive to maintain Uber’s valuation after the IPO. If the company’s valuation remains above $120 billion for 90 days in a row, he will get net stock bonuses upwards of $100 million.

Uber is also looking to diversify its offerings to remain valuable. Although it’s mostly known as a ride-hailing service, it is working on many other offerings and services.

For Uber, transportation is a platform feature that is central to its business, but not its end game. One need only look at Uber Eats for confirmation of that, but it goes further. Uber is working its way deeper into payments via Uber Cash, for instance, while also eying new partnerships that involve food, car rentals, freight and other areas. In a letter that came with the Uber IPO prospectus, Khosrowshahi wrote that Uber is “still barely scratching the surface when it comes to huge industries like food and logistics.”