20.7 C
London
Wednesday, August 5, 2020

Uber values itself at $82bn ahead of IPO

Must read

Passengers must stay on cruise ship in Norwegian harbour

A cruise ship carrying more than 200 people docked in a Norwegian harbour on Wednesday and ordered to keep everyone on board after a...

Miley Cyrus and Dua Lipa share selfie from the recording studio

Miley Cyrus has teased new music by sharing a selfie with Dua Lipa from the recording studio. The pop stars posed with the producer Andrew...

Megan Fox tells boyfriend Machine Gun Kelly ‘my heart is yours’

Megan Fox has told her boyfriend Machine Gun Kelly that “my heart is yours”, days after the pair made their relationship Instagram official. The Hollywood...

Meghan Markle wins court ruling to protect friends’ identities

The Duchess of Sussex has won the latest tussle in her legal action against a British newspaper after a UK High Court judge ruled...

Uber is set for a wild ride on Wall Street with the biggest and most hotly debated initial public offering (IPO) in years.

The world’s leading ride-hailing service set the stage for its long-awaited arrival on the stock market by pricing its IPO at 45 dollars per share late on Thursday.

The price is at the lower end of its targeted range of 44 to 50 dollars per share, a decision that may have been driven by the escalating doubts about the ability of ride-hailing services to make money since Uber’s main rival, Lyft, went public six weeks ago.

Even at the lower price, Uber now has a market value of $82.4bn — significantly more than century-old car makers General Motors and Ford.

Uber will face its next test on Friday when its shares begin trading on the New York Stock Exchange.

No matter how the stock swings, the IPO has to be considered a triumph for the company most closely associated with a ride-hailing industry that has changed the way millions of people get around while also transforming the way millions of more people earn a living in the gig economy.

The IPO raised another 8.1 billion dollars for Uber as it tries to fend off rival Lyft in the US and help cover the cost of giving rides to passengers at unprofitable prices.

The San Francisco company already has lost about 9 billion dollars (£6.9bn) since its inception and acknowledges it could still be years before it turns a profit.

That sobering reality is one reason that Uber fell well short of reaching the 120 billion dollar market value that many observers believed its IPO might attain earlier this year.

Another factor working against Uber is the cold shoulder that investors have been giving Lyft’s stock after an initial run-up. Lyft’s shares closed Thursday 23% below its IPO price of 72 dollars. The jitters about an intensifying US trade war with China have also hit the stock market this week.

Despite all that, Uber’s IPO is the biggest since Chinese e-commerce giant Alibaba Group debuted with a value of 167.6 billion dollars in 2014.

“For the market to give you the value, you’ve either got to have a lot of profits or potential for huge growth,” said Sam Abuelsamid, principal analyst at Navigant Research.

And Uber boasts growth galore. Its revenue last year surged 42% to 11.3 billion dollars while its cars completed 5.2 billion trips around the world, either giving rides to 91 million passengers or delivering food.

Uber might be even more popular if not for a series of revelations about unsavoury behaviour that sullied its image and resulted in the ousting of its co-founder, Travis Kalanick, as CEO nearly two years ago.

The self-inflicted wounds included complaints about rampant internal sexual harassment, accusations that it stole self-driving car technology, and a cover-up of a computer break-in that stole personal information about its passengers.

Related: Uber exposes itself to sex abusing drivers

Some Uber drivers have been accused of assaulting passengers, and one of its self-driving test vehicles struck and killed a pedestrian in Arizona last year while a back-up driver was behind the wheel.

- Advertisement -

More articles

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -

Latest article

Passengers must stay on cruise ship in Norwegian harbour

A cruise ship carrying more than 200 people docked in a Norwegian harbour on Wednesday and ordered to keep everyone on board after a...

Miley Cyrus and Dua Lipa share selfie from the recording studio

Miley Cyrus has teased new music by sharing a selfie with Dua Lipa from the recording studio. The pop stars posed with the producer Andrew...

Megan Fox tells boyfriend Machine Gun Kelly ‘my heart is yours’

Megan Fox has told her boyfriend Machine Gun Kelly that “my heart is yours”, days after the pair made their relationship Instagram official. The Hollywood...

Meghan Markle wins court ruling to protect friends’ identities

The Duchess of Sussex has won the latest tussle in her legal action against a British newspaper after a UK High Court judge ruled...

Security tight in Indian-controlled Kashmir a year after revocation of autonomy

Authorities enforced security restrictions in many parts of Indian-controlled Kashmir, a year after New Delhi revoked the disputed region’s semi-autonomy in a decision that...
%d bloggers like this: