Uber is planning to file S-1 in April 2019. The valuation is expected to be $120B.
Uber Will Issue S-1 For IPO In April 2019
Reuters Reports Uber IPO Date: According to Reuters, Uber is planning to kick off IPO in April 2019. Uber will issue its required public disclosure, known as an S-1, and launch its investor roadshow in April. Uber’s revenue last year was $11.3 billion, while its gross bookings from rides were $50 billion. But the company lost $3.3 billion, excluding gains from the sale of its overseas business units in Russia and Southeast Asia. Lyft’s revenue for last year was $2.2 billion, with $8.1 billion in gross ride bookings. The company lost $911 million.
Uber Valuation Hits $120 Billion, More Than Nvidia, 3M and PayPal
According to CNBC, Uber’s eye-popping $120 billion valuation would make it worth more than Nvidia, 3M and PayPal. Proposals for the ride-hailing IPO would reportedly value Uber at $120 billion as a public company. At that valuation, its market value would be bigger than profitable, established companies like Nvidia, Amgen and 21st Century Fox. Uber lost more than $1 billion last year.
Last year it managed to stem some of the bleeding. Its adjusted losses slowed by 15 percent, to $1.8 billion, according to Uber’s self-reported financials published in February. In 2017, Uber lost $2.2 billion. The company increased its revenue, though at a slower pace than in the previous year. Full-year revenue last year was $11.3 billion, up 43 percent year over year.
The revenue growth came in at only 2 percent between Q3 and Q4
Pymnts.com reported that, while ridership was on the incline, and Uber reported $50 billion in total bookings for ridesharing and food delivery for the final quarter of the year, revenue growth came in at only 2 percent between Q3 and Q4. In January, it was reported that Uber’s valuation, when it goes public, is likely to be $14 billion less than its most recent private valuation.
The challenge for Uber going forward, according to David Brophy, professor of finance at the University of Michigan’s Ross School of Business, is its losses. This, he noted last month to pymnts.com, gives investors pause around whether or not Uber will ever be able to stop subsidizing some markets enough that it can actually put the firm in the black.
“Uber needs to show it can control costs and can make money — basically provide a strong argument that its business model is not broken, and that it can achieve and sustain profitability despite issues with drivers, customers and politicians,” he said.
Uber vs Lyft Revenue
Dara Khosrowshahi, Uber’s current CEO, has been focused on cleaning up the company’s financials ahead of an IPO. Fortune reported that Uber saw $11.3 billion in revenue last year and a loss of $3.3 billion. Lyft, by contrast, said in its prospectus that its 2018 revenue totaled $2.2 billion and a loss of $911 million, which according to Axios would be the largest loss ever for a company entering the public markets for the first time. While Uber was valued at $72 billion a year ago, the company is said to be hoping for a market cap of $120 after its IPO. Reuters said some analysts expect its market cap to be closer to $100 billion based on the company’s recent financials. Lyft, meanwhile, is looking for a market valuation between $20 billion and $25 billion after being valued at $15 billion in its most recent private funding.
Warning To Retail Investors: Eight of the ten largest tech IPOs has one down
With an estimated company valuation of around $100 billion, Uber could be the largest IPO in U.S. market history. Benzinga reported that, unfortunately for retail investors who do not get shares at the IPO price, history hasn’t been kind to large tech IPOs. Eight of the ten largest tech IPOs in history declined between 25 and 71 percent in the year following their first day of trading. The most recent example of a high-profile tech IPO bust is Snap, Inc. Snap closed its first day of trading in March 2017 at a price of $24.48. Roughly two years later, Snap shares are now trading at $11.44.
Reasons Why Lyft Might Beat Uber in the IPO Race
Investors previously considered that investing in Uber’s upcoming IPO would make a more profitable and more reliable investment with significantly mitigated risks in oppose to its “smaller” competitor, Lyft, it now appears that there are more than several reasons why Lyft IPO may beat Uber initial offering in the long run.
Lyft IPO Brings a “Unicorn” Status to the Rideshare Startup
Lyft managed to double its profits in the course of 2018 and in oppose to the previous year 2017. While Lyft recorded 1 billion dollars in 2017, the company reported 2.2 billion dollars only a year later.
One of the many reasons why Lyft could be a better investment in oppose to its direct competitor, Uber, is the fact that Uber appears to be “bloated”.
Uber is also having regulatory issues, related to the fact that Uber is available in around 70 countries across the globe, while Lyft is focused on the US and Canada, having a narrowly determined targeted audience and having to deal with a leaner business model in oppose to Uber.
Since Lyft is focused on the US, the company has made sure that they are most commonly dealing with an environment which is business friendly in most cases.
Moreover, now that Lyft is a publicly traded company with its own IPO, the startup is getting more on its value, while Uber is yet to issue their IPO, that way allowing Lyft to take a head start.
In addition, Lyft also started to invest in self-driving cars, much like Uber Eats, following its competitor step-by-step in hope to surpass it with a similar but leaner business model.
While two rideshare companies are worth billions of dollars, Lyft have issued their IPO back at the beginning of March, while Uber is making final preparations for their own Initial Public Offering, which at the same time testifies on the growth potential of these tech companies.
However, it appears that car rental companies, on the other hand, are suffering on the cost of success of rideshare business according to the latest report from Epsilon-Conversant as more customers are switching from rentals to rideshares.
According to the latest report published by Epsilon-Conversant, a digital marketing company, rideshares are taking over the travel and transportation business. Based on the latest results, it appears that more than 50% of previous car rental customers have stopped using rental services, switching their focus to rideshares like Lyft and Uber.
That is how Uber and Lyft came to the status of tech unicorns in a relatively short span of time, causing loss of profit to car rental industry, while the digital marketing company s reporting that 63% of car rental customers have reduced the frequency of using car rentals, preferring rideshares.
In the period of the last two years that the report had covered, the travel and transportation business brought 140 billion dollars in transactions, of which car rentals have recorded a major loss of 3.2 billion dollars.
Lyft and Uber made up for 30% of the total amount in transactions, being a preferred transportation choice when compared to rentals in the last two years.
This might be the case because Lyft and Uber represent a cost-effective solution with an increasing demand in the last several years.
On the other hand, car rentals are still favored by older generations as much as millennials are mesmerized with Lyft or Uber services, which might provide the car rental industry with a specific demographic the business can rely on.