Uber stumbles out of the IPO gate

Despite the eye-popping valuation Uber dialed back some of its earlier ambitions for a value exceeding $100 billion. — AFP  File

This year, widely expected to be the busiest for mega US tech listings this century, got off to a rocky start as a partial government shutdown shuttered the agency that approves IPO documents for 35 days, all but killing activity in the first quarter.

That gave Uber a market value of $72 billion, almost $50 billion less than investment bankers had forecast when work on the IPO began. As the company put it in its prospectus, the moment their competitors "shift their strategy towards shorter-term profitability", Uber wins.

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The answer to those questions don't really matter, because money isn't real and also Uber apparently has a shitload of it.

Uber's IPO was slated to be the biggest IPO in 2019, but the company's share price was about one-third less than experts predicted. The company is also dealing with a class-action lawsuit brought by drivers who are fighting their independent contractor status, which it's now attempting to settle while it's still in the "lose all our money on purpose" phase of its business. The roll-out will need to be slow if it's going to be effective and there is only so many losses a publicly traded company can sustain before many investors stop putting their money into the company. 'As we aim to reduce Driver incentives to improve our financial performance, we expect Driver dissatisfaction will generally increase, ' it notes.

Uber raised nearly US$25 billion in 23 rounds of financing before going public.

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An Uber driver protesting earlier this week.

Uber's shares ended the day down 7.6 percent at US$41.57, even as the S&P 500 reversed losses to end in positive territory. This is basically the opposite of what Uber's board hoped would happen. The San Francisco-based company lost US$3.04 billion last year on an operating basis on revenue of US$11.3 billion, bringing total operating losses over the past three years to more than US$10 billion, according to filings.

Uber is a decade-old ride-share mobile app that is live in 63 countries and over 700 cities.

Meanwhile, scores of Uber drivers say they have been mistreated by the company as they work long hours and wear out their cars picking up passengers as they struggle to make ends meet.

Uber CEO Dara Khosrowshahi was interviewed in the back of an Uber ahead of the company's impending initial public offering.

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