By Spencer Feingold
Uber released its anticipated initial public offering price range of $44 to $50 per share on Friday in an updated filing to federal regulators — lower than where shares were previously rumored to be valued.
The range sets the company's valuation between $80 and $90 billion.
The ride hailing giant plans to sell 180 million shares when it begins trading on the New York Stock Exchange in May under the ticker UBER.
Uber’s public filing comes just a month after its much smaller North American competitor Lyft ($LYFT) made its public debut on the Nasdaq. After a blockbuster IPO, Lyft’s stock has weakened significantly — shares were down nearly 22 percent from their IPO price on Friday.
“It was very prudent of them to reduce the price,” John Jannarone, the editor-in-chief of the financial news site IPO Edge, told Cheddar on Friday. “They don't want to be Lyft 2.0.”
Like Lyft, Uber will go public as an unprofitable company. The San Francisco-based company reported $11.3 billion in revenue last year, a sharp increase from the $7.9 billion in revenue in 2017. However, in its updated filing with the Securities and Exchange Commission (SEC), Uber said it expects to post a loss of between $1 billion and $1.1 billion in the first quarter of 2019.
“There are really a lot of questions here that the company has got to answer if we are ever going to get to profitability,” Jannarone said.
In its updated SEC filing, Uber also announced that PayPal ($PYPL) had agreed to make a $500 million investment in the company.
Seen as a behemoth in the space, Uber completed 14 million rides a day in 2018, driving customers 26 billion miles, according to the company’s SEC filing. Since its founding in 2009, the company has completed a total of over 10 billion rides and has expanded to more than 700 cities in over 60 countries.
“Because we are not even one percent done with our work, we will operate with an eye towards the future,” Dara Khosrowshahi, the company’s CEO, wrote in the filing.
But analysts stress that competition is stiff in the ride-sharing sector.
“At the end of the day, this is a situation where you are going to go on your phone and most of the time choose the cheapest ride,” Jannarone said.
In recent years, Uber has expanded its business with services like Uber Eats, a food delivery platform, which Jannarone noted also operates in a “hyper competitive” space. The company also recently launched Uber Freight, which creates an on-demand marketplace for shippers and carriers.
“If we are unable to compete effectively in these industries, our business and financial prospects would be adversely impacted,” the company’s SEC filing read.
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