Uber Chief Executive Dara Khosrowshahi looked to convince money managers that the firm’s growth plans justify a valuation of as much $91.5 billion in its initial public offering. At Claridge’s, a five-star hotel located in London’s affluent Mayfair district, more than 100 investors listened to Khosrowshahi and Chief Financial Officer Nelson Chai speak about the company’s strategies for expanding their food delivery enterprise and push into various other business sectors like shopping.
Uber is attempting to convince investors that it is capable of making the move from being only a ride service to a technology-driven platform providing services varying from delivering groceries and take-out meals to arranging freight transport. According to one investor who opted not to be named, Uber made a number of references to the Amazon platform and how they are planning a similar build out.
Uber revealed on April 26th that it was targeting a valuation of somewhere between $80.5 billion and $91.5 billion USD, lower than the $120 billion target that investment bankers had told the company last year that it would achieve. It further revealed that it posted a loss of approximately $1 billion on sales of around $3 billion during quarter one of 2019. The reduced valuation comes following the weak performance of scaled-down rival Lyft, whose shares have fallen close to 20% from the time the company was listed last month.
Following widespread press coverage of Lyft’s initial public offering, Uber seems to be targeting a more subdued roadshow. Investors were not informed of the presentation’s location until approximately three hours before it officially kicked off, and all attendees were required to present a government-issued identification before being allowed to enter with media being strictly barred.
A different investor who also opted not to be named, lamented that the function was fairly brief, stating they were not given the opportunity to ask very many questions. An individual who was working on the actual roadshow stated that the presentation, the only one being held for investors outside of the United States, lasted just ten minutes, with the remainder of the time being dedicated to questions and answers.
In addition to questions related to growth and cost-control, there were questions centered around the company’s culture and business procedures following a sequence of scandals. Those include sexual harassment accusations, a significant data breach that was hidden from regulators, usage of questionable software to avert authorities and charges of bribery abroad. The London transport authority made the decision not to renew Uber’s license in 2017 pointing to safety concerns. However, it was given a 15-month probationary operating license last summer, informing a court that it had made improvements to its procedures.
The Uber initial public offering, which is predicted to price on May 9th according to those familiar with the topic, would rate as the largest IPO in the United States since that of Alibaba back in 2014. The Uber IPO will be directed by Morgan Stanley, Goldman Sachs and Bank Of America – Merrill Lynch.