Car-hailing company Uber Technologies is aiming for a valuation of up to $91.5bn (€82bn) in its initial public offering, potentially the largest US listing in years and a test of investor appetite for a high-growth but highly unprofitable business.
The valuation that Uber is seeking in its IPO is less than the $120bn that investment bankers told Uber last year it could fetch, and closer to the $76bn valuation it attained in its last private fundraising round in 2018.
This reflects the poor stock performance of its smaller rival Lyft following its IPO last month. Lyft shares ended trading on Thursday down more than 20% from their IPO price amid investor scepticism over its path to profitability.
Lyft completed its IPO at a valuation of $24.3bn, which corresponded to around 11 times its 2018 revenue. By comparison, the top end of Uber’s valuation target is around eight times its revenue last year.
Uber has set a target price range of $44 to $50 per share for its IPO. The company will sell 180m shares in the offering to raise up to $9bn, with a further 27m sold by existing investors for as much as $1.35bn.
The combined value of Uber shares sold in the IPO could be around $10bn.
The Uber IPO would rank it as the largest in the US since that of Chinese e-commerce giant Alibaba in 2014.
The updated public filing comes as Uber gears up to begin its investor road show, in which management will spend the coming days pitching to public markets investors. Uber expects to price the IPO on May 9 and then begin trading on the New York Stock Exchange the following day.
Underscoring the company’s ability to generate revenue but also the scale of its losses, Uber reported in the filing a net loss attributable to the company for the first quarter of 2019 of around $1bn on sales of roughly $3bn.
“When it comes to Uber, we believe there are still questions over the current car-sharing model, the economics of which are not immediately or obviously attractive for sustainable, long-term investment,” said Mark Hargraves, head of Framlington Global Equities.
Uber also said PayPal had agreed to purchase $500m of stock in a private placement at the price the IPO eventually settles at. The two companies also said they will “explore future commercial payment collaborations”.