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Uber IPO is oversubscribed by day two of roadshow

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Uber Technologies Inc has demand for all of the shares offered in its initial public offering days after it began marketing the sale, people familiar with the matter said.

[LONDON] Uber Technologies Inc has demand for all of the shares offered in its initial public offering days after it began marketing the sale, people familiar with the matter said.

The initial investor feedback comes after Uber kicked off its IPO roadshow with meetings in London on Monday, the people said, asking not to be identified because the discussions were private. Uber met potential buyers in New York Tuesday and will head to cities including Boston and San Francisco as it seeks to raise as much as US$9 billion in its IPO next week in what will be the biggest listing of the year so far.

Demand for the share sale is currently focused on the lower end of Uber's targeted share price range, though that could still shift as talks with investors continue, the people said. That would put the amount that would be raised in the IPO closer to US$7.9 billion.

A spokesman for the San Francisco-based company declined to comment. A representative for Morgan Stanley, which is serving as left lead for the IPO, also declined to comment.

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The world's biggest ride-hailing company is offering 180 million shares at US$44 to US$50 apiece, according to a regulatory filing last week. At the top of the range, the listing would value Uber at almost US$84 billion, based on the number of shares outstanding after the offering as detailed in the filing.

On a fully diluted basis, including the addition of stock options, restricted shares or other stakes not included in the outstanding total, the valuation could top US$91.5 billion. That's still down from initial estimates of about US$120 billion from investment banks pitching for roles on the deal.

LYFT FALLS

Strong IPO demand doesn't necessarily translate to longer-term success.

Lyft Inc, the smaller alternative to Uber in the US and Canada, told investors on the second day of its roadshow last month that its books were oversubscribed. The company then increased the IPO price range and the number of shares for sale to raise US$2.34 billion. Lyft's shares jumped 21 per cent in their trading debut but have since fallen 17 per cent below their US$72 offer price.

On Tuesday, a trio of Uber executives pitched the offering to hundreds of prospective public market investors at the Mandarin Oriental Hotel in Manhattan. Chief Executive Officer Dara Khosrowshahi and his deputies said that competition with Lyft hasn't cut into Uber's relative market position.

Mr Khosrowshahi, who ran Expedia before joining Uber, told investors that, like the travel industry with his former employer and Booking Holdings Inc, there's room in ride-hailing for more than one competitor, according to people who attended the meeting and asked not to be identified because the talk was private.

That's a far cry from the days of Uber trying to run Lyft out of business or arguing that it would be a winner-take-all market. Mr Khosrowshahi has taken a less combative tone toward Lyft than his predecessor, Travis Kalanick.

CULTURAL TURNAROUND

At the Manhattan roadshow, the Uber executives emphasized how they had turned around the company's corporate culture. They faced questions about slowing growth, the total addressable market and self-driving cars, the people said.

Uber had an estimated net loss of US$1.07 billion on US$3.07 billion in revenue during the first quarter, according to its filings with the US Securities and Exchange Commission. Revenue growth slowed to 19 per cent compared to the same quarter last year, down from 22 per cent growth in the comparable fourth quarter, it said.

The company is betting expansion into new markets and new business areas will attract investors to its IPO. In London on Monday, Uber managers touted their plans to expand in logistics and other transportation businesses, including scooters, autonomous driving and mass transit, a person familiar with the matter has said. Uber aims to become a one-stop shop for customers who would only need to use one platform for multiple services.

In addition to Morgan Stanley, Uber's offering is being led by Goldman Sachs Group Inc and Bank of America Corp. The company plans to price its shares on May 9, and begin trading the following day on the New York Stock Exchange under the symbol UBER.

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