2019 Tech IPOs: Is Uber IPO Worth Buying? Will It Be A Good Investment? Eight of the Ten Largest Tech IPOs Lost Value!

2019 Tech IPOs: Is Uber IPO Worth Buying? Will It Be A Good Investment? Eight of the Ten Largest Tech IPOs Lost Value! Tech IPO’s might be a little risky if you look back to the examples. Uber is planning to file S-1 in April 2019. The valuation is expected to be $120B.

When will Uber IPO happen?

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.

Is Uber IPO worth buying?

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.

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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.

CBInsights, The 2019 Tech IPO Pipeline

Is Uber IPO a good investment?

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.

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Uber IPO forecast

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.

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.

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“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.

Car rental companies are suffering

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.

Featured Image: Unsplash

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Aamir Kapoor is a fintech writer specializing in cryptocurrency and blockchain. He has a background in finance and banking and was a researcher.