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Uber’s IPO: The Most Watched Public Offering in Years

  • Uber’s upcoming May 10, 2019, IPO could be the biggest and hottest offering in years
  • The company is looking to raise nearly $9 billion through its IPO, which could contribute to a market valuation of $84 billion or more
  • The Uber pitch draws a parallel between the company and Amazon, emphasizing the massive expansion potential of the ridesharing platform

Uber Technologies Inc.’s (anticipated ticker symbol NYSE: UBER) upcoming IPO is anticipated to be the largest of 2019, and, according to a Bloomberg report, it could also be the hottest public offering in years (http://nnw.fm/oW2Kb). According to the report, Uber is seeking to raise nearly $9 billion through its public offering, which could contribute to an astronomical company market valuation of $84 billion.

Some analysts even predict a valuation exceeding $91 billion, in which case Uber’s IPO would be the largest since Alibaba Group Holding Limited (NYSE: BABA) went public with a target price of $68 per share in September 2014 (http://nnw.fm/cRnB8). Uber plans to offer 180 million shares at a price in the range of $44 to $50 each.

Currently, Uber has established itself as the number one player in the ridesharing business. The company’s core driving service is worth over $75 billion. Financial analysts, however, predict a rapid expansion in the range of other transportation solutions offered by the tech giant.

Uber Eats is a food delivery service, and Uber Freight provides another operational line. The full development of these diversified transportation solutions has already resulted in comparisons between Uber and Amazon.com Inc. (NASDAQ: AMZN).

There are numerous parallels between the two enterprises.

According to a Bloomberg analysis, Amazon began its journey as a money-losing online book retailer. It was fighting an uphill battle against well-established brick-and-mortar giants in the field. Eventually, Amazon ascended to the position of the world’s largest online retailer – a model that Uber aims to duplicate for its own expansion (http://nnw.fm/pv9Oc).

Uber executives plan to convince investors that the company is a transportation and logistics trend-setter. It expects to build and supply demand for a diversified range of services – from scooters to freight. Currently, Uber is barely scratching the surface of a massive market that will continue expanding in the years to come, the Bloomberg report concludes.

The Amazon parallel is a clever one, because it establishes possibilities and makes investors feel comfortable with the prospects ahead.

Uber is currently working with underwriters like Goldman Sachs Group, Morgan Stanley and Bank of America to craft its IPO pitch. Apart from drawing comparisons to tech giants like Amazon and Alibaba, the pitch will also highlight the smaller and niche business opportunities like Uber Eats.

Uber is also working to explain the company’s financial results so far. At the beginning of April, Uber gave potential investors a first look at key financial information. In 2018, Uber lost $3.04 billion on revenue of $11.3 billion. In addition, the company announced a net income of $997 million in 2018.

Uber is putting a lot of emphasis on the platform and its potential rather than on the financial results. “We can rapidly launch and scale platform products and offerings by leveraging our massive network,” the company said in a release. “Each new product adds nodes to our network and strengthens these shared capabilities, enabling us to launch and invest in additional products more efficiently.”

For more information, visit the company’s website at www.Uber.com

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