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Home / Business / Uber and Lyft charge towards potential I.P.O.s next year

Uber and Lyft charge towards potential I.P.O.s next year



Uber and Lyft have been fighting for years for customers in the fast-growing ride-hailing business. Now the bitter rivals could fight for investors in their IPOs.

Uber has received proposals from investment banks Morgan Stanley and Goldman Sachs stating that the technology giant could be worth $ 120 billion on an initial public offering On Tuesday this issue, which was not openly debated, said: [19659002] At US $ 120 billion, Uber's Wall Street debut would be the largest since Alibaba Group's IPO on the New York Stock Exchange in 2014. [196592002] The market for tech IPOs rose sharply in 201

8. Nearly 200 companies have raised more than $ 53 billion in IPOs in US markets. This is the busiest year for tech newcomers on Wall Street since 2014, according to Dealogic. [19659005] But a blockbuster public offering for Uber that has blown billions of dollars since its inception in 2009 and not nearby Sustainable Profitability appears to be a major event Risk appetite for listed investors

Banks also suggested that Uber's stock be listed earlier than originally planned for the end of 2019. This would mean that the company's main competitor in the United States of America, Lyft, which recently voted JPMorgan Chase on its IPO, said two other people had informed that they were not allowed to speak publicly about it.

This year, Lyft estimated the company's last donation round at $ 15 billion. It had planned to go public in the spring, distance between his I.P.O. and Ubers.

Now, companies could find themselves in a race to public markets and woo investors eagerly seeking a slice of two prominent tech industry favorites. It is expected that the company that starts first will have an advantage and can charge a higher price for its shares.

"The first ride I.P.O. will receive a lot of attention, so I think there is some marketing value in being the first," said Kathleen Smith, a director at Renaissance Capital, which provides fund research and management.

Uber's Potential Value in One The public offering and Lyft's underwriter were first reported on Tuesday by the Wall Street Journal .

Uber's IPO is likely to be one of Wall Street's biggest financial events next year. At $ 120 billion, it would compete with Facebook's total value if it went public in 2012 with a market capitalization of $ 104 billion, Smith said.

Unlike Facebook in 2012, Uber is not profitable in everyday life. Uber has been trying to lose its most lossy business since Dara Khosrowshahi, who took over his senior management last year and withdrew from expensive expansion plans in Russia, China and Southeast Asia.

The company achieved a 2018 profit in the first quarter thanks to the sale of some of these operations, but the second quarter was a return to form. Uber reported a loss of $ 891 million, despite the fact that its bookings – the amount taken by drivers – had risen by 41 percent over the previous year and revenue was $ 2.7 billion.

As a private company, Uber is not required to publish its quarterly results publicly. But for some time now it has revealed basic financial information to give investors a better sense of their health.

The $ 120 billion valuation would also be a big jump over previous estimates. In December, Japanese conglomerate SoftBank and an investor consortium announced plans to buy 17.5 percent of Uber at a price of around $ 33 per share. That brought Uber worth about $ 48 billion.

At the time, Uber struggled to overcome a number of management issues, and the SoftBank investment was a sharp cut on previous rounds, which brought the company up to $ 70 billion. 19659005] A $ 500 million investment by Toyota in August, Uber estimated at $ 76 billion.

San Francisco aggressively seeks to expand the business of UberEats, the food delivery business, and is expanding the rental of electric bicycles and scooters as well as freight shipments.

Lyft, also based in San Francisco, has always been Uber's much smaller but toughest competitor in the United States. It began to expand outside the country and has largely avoided the regulatory struggles and bad publicity that plagued Uber throughout the world. Like Uber, Lyft sees the rental of bicycles and scooters as a way to expand. The company acquired Motovate, the owner of CitiBike, in July for $ 250 million.

According to Lyft, revenue in 2017 was $ 1 billion – an increase of 168 percent compared to last year – but no gains or losses for the year. Financial analysts assume that Lyft, like Uber, has burned substantial amounts of cash.

Uber and Lyft both work on autonomous vehicles. Executives believe that driverless cars could eliminate one of their biggest expenses – human drivers. But the technology is currently prohibitively expensive and far from widespread commercial use.

Uber considered selling its autonomous vehicle unit, while Lyft pursued the technology mainly through partnerships.

Lack of profits is unlikely to deter investors. As was the case during the dot-com boom almost 20 years ago, Wall Street has blossomed into tech companies that are growing fast but are going up in flames with the money.

"I think investors will be comfortable with Uber." Smith said. "The problem will be at what price."


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