Uber CEO Dara Khosrowshahi cast a longer shadow of doubt on the company’s long-anticipated IPO, noting it may not happen this year despite his previous declarations it was teeing up the public debut for the second half of this year.
A market selloff and fears of a recession looming in the background have spooked investors and may have done the same for Khosrowshahi and crew.
Earlier this week, two reports suggested Uber’s reported valuation of $120 billion may be too optimistic and that, based on information the company shared confidentially with creditors, that its valuation is closer to $70 billion up to $90 billion.
“The good news is that we’ve got a strong balance sheet, so we don’t need to go public this year,” he told the Wall Street Journal in an interview.
He added that an Uber IPO is “a desire” but noted “if it doesn’t happen, it doesn’t happen. I’d be disappointed, and I think our shareholders would be disappointed, but the company would be just fine.”
Uber in December filed IPO paperwork confidentially with the Securities and Exchange Commission, a move which allows it to learn of potential SEC issues and address them before making its IPO filing public.
Matt Kennedy, a senior IPO market strategist at institutional research firm Renaissance Capital, said in an earlier interview with the San Francisco Business Times that strong performing companies do not need to obsess over timing the market for an IPO.
“Uber has decided to become public this year, likely the first or second quarter, and I think they would be wise to move forward with those plans,” Kennedy said. “Maybe delay by a few weeks if the market is actively crashing.”
Another incentive to go public by the end of this year may be Uber’s agreement with the SoftBank Group, which gave the investor a 15 percent stake in the ride-hailing transportation company. Under the agreement, Uber is required to allow investors who invested at least $100 million into the company, or who held shares for a minimum of five years, to sell their Uber holdings on the secondary market if the company does not do an IPO this year.
Uber is lucky that the SEC can not evaluate the company during the #GovernmentShutdown, the true results of this companies value will be shocking.
This article has an angle on why they may have filed their IPO with the SEC, in the last paragraph. If they don’t go public this year they will be giving investors who put in $100 million+ or investors who have been in 5+ years. It is so hard to figure out their angle, one thing for sure though, this company and what they are doing is super shady!