Arthur J. Villasanta – Fourth Estate Contributor
San Francisco, CA, United States (4E) – Transportation network company (TNC) Uber Technologies Inc., the world’s largest ride-hailing firm, might be valued as much as $120 billion when it IPOs in 2019.
If it holds, this massive amount will make Uber’s IPO the largest in history. It will massively dwarf the current largest IPO, which was set by China’s Alibaba Group Holding Ltd. Alibaba raised $25 billion from its IPO in 2014. The largest IPO for any U.S.-based firm is that for General Motors Corporation. GMC raised $20.1 billion in 2010.
The estimated valuation of Uber is $50 billion more than the company’s most recent valuation Goldman Sachs and Morgan Stanley are in a race to secure top roles in the Uber IPO. Both financial services firms delivered the valuation proposals to Uber last month.
The Uber valuation is indicative of the promise the companyu’s business model holds despite disappointing operating results over the past years. Uber’s full-year net loss widened to $4.5 billion in 2017 from $2.8 billion in 2016. Gross revenue for 2017 came to $37 billion, a jump of 85% compared to 2016.
Uber, however, said its U.S. ride-hailing market share fell from 82% at the start of 2017 to 70% in the fourth quarter. Uber said its market share has now stabilized.
Dara Khosrowshahi, who took over as Uber CEo in 2017, last month said that Uber is on track for a 2019 IPO. He isn’t concerned that rival Lyft goes public first because he expected enough demand for both companies.
Both companies have seen incomes fall as they fight to attract drivers and enter new markets. Uber has also been seeking new areas of growth, including food delivery services.
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