Uber has filed for an initial public offering – IPO – and is now in something of a race with Lyft to see who can be the first to tap those public markets. There are no publicly listed – US at least – ride sharing companies so these two are striving to be first. The earlier gets to set expectations for the second which is why there’s that race:
Uber Technologies Inc. filed paperwork confidentially this week for its initial public offering, according to people familiar with the matter, as it races with smaller rival Lyft Inc. to be the first to market.
It’s was pretty obvious that Uber was going to file. They’d almost announced it with these terms in their last capital raising:
Mr Khosrowshahi has said for months that Uber was “on track” for a listing in the second half of 2019. Provisions included in the $9.3bn investment it took from SoftBank a year ago set September 30 next year as a deadline for Uber to file for an IPO, after which shareholders with stakes over $100m or who have held stock for more than five years would be released from restrictions on selling.
That doesn’t mean they’d have to IPO. But there’s a little wrinkle there. All that founder’s stock could be sold if they didn’t. Obviously, not all of it would be etc. But there’s a limit on the number of shareholders you can have in a private company before you’ve got to start reporting to the SEC as if you’re publicly quoted on an exchange. Increase the ability of people to sell off a little of their stock awards and, given the life of the company so far, you could well breach that. If you’ve got to be paying all the reporting costs of being a public company then, well, why not be a public company?
The ride-hailing company filed the confidential paperwork on Thursday, one of the sources said, in lock-step with its smaller U.S. rival, Lyft, which also announced on Thursday it had filed for an IPO.
What that looks like is that everyone was ready to go but they’re were playing a game of chicken. Anti-chicken perhaps, who goes first? So, Lyft announces that it has filed, Uber sticks their own paperwork in.
One guess is that Uber will try for a $100 billion valuation. Not bad for a company that is still loss making overall….