Uber reveals IPO with warning it may never make a profit

  • Uber reveals IPO with warning it may never make a profit

Uber reveals IPO with warning it may never make a profit

"We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability", the company said in the "S-1" form or the IPO Prospectus submitted to the Securities and Exchanges Commission. Although its user base consists of customers of other services and ride-sharing, the number is nearly five times the 18.6 million announced by competitor Lyft Inc.

Uber is providing a look under the hood of its own company in the lead-up for the anticipated debut on the stock market, showing powerful growth but an ongoing struggle fix its reputation and to overcome enormous losses. That's below earlier estimates of $120 billion. Alphabet also owns approximately 5% of Uber rival Lyft's inventory.

The company is likely to price their shares between the value of 48$ and 58$ per share at the very start of the public sale, in oppose to Lyft's starting price of 72$ per share.

Uber's ride-hailing business, which is its primary calling card, generated $9.2 billion in revenue in 2018, with gross bookings of $41.5 billion over the course of the year, according to the filings.

After making the public filing, Uber will start a series of investor presentations, called a roadshow, which according to the Reuters will start the week of April 29.

Its history that is unprofitable could induce its prices that are ride-hailing to be finally raised by Uber unless it expand to other markets and lines of business or could reduce its costs by shifting to cars. Uber applied to list its common stock on the New York Stock Exchange under the symbol "UBER".

Last year, the ride-hailing giant settled a legal dispute over trade secrets with Alphabet Inc's Waymo self-driving vehicle unit.

Uber Eats addressed its small order problem last month by charging app users a $2 flat fee on orders under $10, in addition to existing charges, to make up for losses.

While Uber has yet to disclose the exact valuation it is seeking, it could pull off one of the largest-ever initial public offerings (IPOs) in the tech world.

Uber highlighted Seattle's landmark law that allows drivers to unionize as an example of legislation that could force the company to "modify our business model in those jurisdictions as a result".

Those have included sexual harassment allegations, a massive data breach that was concealed from regulators, use of illicit software to evade authorities and allegations of bribery overseas.

Travis Kalanick, the former CEO who stepped under stress in 2017 in the board, is one of Uber's biggest shareholders, owning nearly 9% of the company's stock.

Uber said in its filing its ridehailing position in the United States and Canada was "significantly impacted by adverse publicity events" and that its position in many markets has been threatened by discounts from other ride-hailing companies. For context, Uber has been exiting markets like China, Southeast Asia and Russian Federation by merging operations with rivals who were forcing the company to burn more capital for competitive reasons.

In 2017 Uber's toxic culture resulted in a campaign that saw hundreds of thousands of people delete their accounts, an issue that is addressed in their IPO.