Uber net loss widens as investors seek to buy shares

Uber’s net loss widened to $1.46bn (€1.23bn) in the third quarter as the US taxi- hailing leader struggled to fend off competition, legal challenges and regulatory scrutiny.

The San Francisco-based company reported financials to shareholders as part of a formal bid from a SoftBank-led consortium looking to buy a large block of shares.

SoftBank said in a statement that at least two of Uber’s early backers intend to sell. The sale of those shares would value the business at $48bn, a 30% discount to the last private valuation.

General Atlantic and Russia’s DST Global, which had both been in talks to buy stock, dropped out of the deal, said one source.

The remaining bidders in the group are SoftBank, Dragoneer Investment, TPG, Tencent Holdings, and Sequoia Capital, which are looking to buy at least 13.4% of outstanding shares.

“SoftBank and Dragoneer have received indications from Benchmark, Menlo Ventures, and other early investors of their intent to sell shares in the tender offer,” a spokesman for SoftBank said.

“Any sales by these shareholders will be pursuant to the same terms and conditions as will be offered to all other eligible holders that participate in the tender offer,” he said. Uber told stockholders gross bookings, the key yardstick of demand for taxi app services, rose 11% to $9.71bn in the three months to the end of September, compared with $8.74bn in the second quarter.

Net revenue rose 21% to $2.01bn in the third quarter from $1.66bn. However, losses, which had been narrowing in previous quarters, reversed course. The net loss rose 38% from the second quarter from $1.06bn.

Uber has been searching for a chief financial officer to fill a much-needed role ahead of an initial public offering expected in 2019.

“Ride-hailing companies hold out the promise of creating a whole new industry, but it’s tough to make judgments based on their fundamentals,” said Masahiko Ishino, an analyst at Tokai Tokyo Securities.

Uber has had a rough year, with the ousting of its former chief executive, an exodus in management and last week’s disclosure of a concealed hack that exposed personal data of 57 million people.

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