Economy

Uber prices blockbuster IPO conservatively to raise $8.1 billion

Uber prices blockbuster IPO conservatively to raise $8.1 billion”

The initial price offer is $45 per share, at the lower end of the scale originally set by Uber, which ranged from $44 and $50.

The IPO gives Uber a valuation of approximately $82.4 billion and is one of the largest IPOs of all time, according to The Guardian.

However, the exact timing remains uncertain - and the first print may not even happen before noon.

Uber indicated its first shares were expected to trade up slightly, in the region of $45.50 to $46.50, when trading opens.

"I think a lot of things go into pricing an IPO".

The year's biggest IPO comes against a backdrop of turbulent financial markets, fueled by the trade dispute between the United States and China, as well as the plunging share price of Lyft, which is down 23 percent from its IPO price in late March. "If you buy, you are buying a bull market, not a company", he added.

What began with ride-hailing in 2009 now includes a food delivery service, business fleet, urban bike and scooter program, and freight operation.

"Ultimately, the success of Lyft's and Uber IPO's offerings will be judged based on post-IPO performance and how these companies can sustain their growth, while moving toward profitability and lowering their cash burn", said Alex Castelli, managing partner at advisory firm CohnReznick. It intends to grow its share of the $700-billion US market from its mere 0.1-percent claim, and it also plans expansion into Europe's $600-billion market.

Uber's earliest investors are making a fortune.

"Uber is basically Lyft 2.0".

Ride sharing accounts for just a sliver of US vehicle miles traveled, which "is simultaneously the bull case and bear case here for these companies".

However, "Uber and Lyft each took nearly a decade to get to their present scale, are seeing growth slow, and incinerate cash at impressive rates while showing modest operating leverage", the firm added - all of which matters now that both have to report their business conditions on a regular basis.



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