Ahead of IPO, Uber Tries to Manage Expectations

April 10, 2019

Uber's plans to reportedly sell $10 billion worth of stock in a public offering next month would value the company at around $100 billion, one of the biggest tech IPOs of all time, but less than the $120 billion many investment bankers expected, Reuters reported.

Despite the enthusiasm for Uber, the world's leading ride-hailing company, the company may fear that investors will balk at the mounting valuations sought by Silicon Valley's most ambitious tech companies, said Joshua Franklin, the Reuters reporter who first reported Uber's plans.

“Tech companies are being a little more cautions in terms of the numbers they’re talking about for an IPO,” Franklin said Wednesday in an interview with Cheddar.

Uber's decision was likely influenced by investors' up-and-down response to rival Lyft's IPO. That company's stock soared to more than $87 a share, well above the IPO price of $72, when it started trading on March 29. Since then, the stock has been repeatedly beaten down to just over $63 a share on Wednesday morning.

"What happened with Lyft definitely with the way the stock has traded since, definitely didn’t set a terribly positive tone for the tech IPO market," Franklin said.

After Lyft's public-market debut, the social media company Pinterest made plans to offer its stock at only $15 to $17 a share, valuing the company at $11.3 billion, less than private investors and venture capitalists had valued the company.

Franklin said investors' doubts over the future profitability of tech companies used to losing money in the interest of growth began to dampen some enthusiasm for new tech stocks.

"Uber is going to be very interesting to see how they navigate that," Franklin said.

For full interview click here.