Uber looking to sell stakes in companies including Didi, CEO says

[TEXAS] The CEO of Uber Technologies said on Tuesday (Dec 14) the company was looking sell stakes in what it considers non-strategic investments in other companies, including its shares in Chinese ride hailing company Didi Global.

Speaking at a virtual fireside chat with a UBS analyst, chief executive Dara Khosrowshahi said many of the companies in which Uber has a stake have recently gone public and are still subject to a lockup period.

While Khosrowshahi said Uber would continue to hold some stakes for strategic reasons, it was looking to sell many of them, including in Didi.

"Our Didi stake we don't believe is strategic. They're a competitor, China is a pretty difficult environment with very little transparency," the Uber CEO said.

Khosrowshahi said the company was in no rush to sell the shares. "Those kinds of stakes we look to monetise smartly over time," he said.

Uber shares rose 4.3 per cent to close at US$37.26 after Khosrowshahi's remarks on Tuesday. He also said Uber last week had its best week ever in terms of company-wide gross bookings at its ride-hail and food delivery operations.

But overall, ride-hail trips remained around 10 per cent below pre-pandemic levels, the CEO said.

Uber had roughly US$13.1 billion tied up in investments in other companies as of the end of the third quarter, including US$4.1 billion in Didi.

Some investors have grown concerned that Uber holding on to these investments sends a signal to the market that stakes in other companies are more attractive than putting freed-up capital into Uber's own operations.

Uber's operational business last quarter for the first time achieved profitability on an adjusted earnings basis, but its Didi stake drove a US$2.4 billion net loss in the third quarter.

Shares of Didi, which has been rattled by a probe by Chinese regulators into its data practices, are down around 53 per cent from their June 30 IPO price.

Under pressure from Chinese regulators, Didi earlier this month said it would withdraw from the US stock exchange and pursue a Hong Kong listing.

Didi and Uber, both backed by Japanese conglomerate Softbank Group, in 2016 struck a deal under which Uber exited the Chinese market and sold its China business to Didi in exchange for equity.

Uber also holds stakes in Indian food delivery company Zomato, South-east Asian rival Grab, self-driving company Aurora Innovation and others.

Grab and Aurora are also backed by Softbank.

REUTERS