Sign up for our free daily newsletter
Get the latest news and some fun stuff
in your inbox every day
To my great delight, Uber has finally filed to go public in early 2019. Its common stock will be available to buy and sell on the NYSE or the Nasdaq, so we can all choose to add a holding in Uber to our portfolios. Uber was able to stay private for so long because it raised billions of dollars from investors at public-company-like valuations from private sources. Companies like these are called unicorns.
I know that the company has its critics, but I think that it is an incredible business that has revolutionised mobility. Everything about its seamless, mobile phone-based business model would not have been possible until a few years ago.
The current valuation, based on recent share deals, is about $75 billion. It is growing fast but is not profitable. It had $12.7 billion in gross bookings last quarter and lost just over $1 billion. It is spending lots of cash on new markets and on businesses, like Uber Eats, which generated $2.1 billion in gross bookings. They are now eyeing electric-scooter rentals, logistics and autonomous cars.
Uber CEO Dara Khosrowshahi (who seems like a very talented leader) points out that some ride-hailing markets generate profit for Uber after accounting for local operations teams, drivers and other regional expenses.
Morgan Stanley seems to have beaten out Goldman Sachs Group Inc. to lead Uber's IPO, which is cool because the lead Morgan Stanley banker moonlights as an Uber driver. More about that story here: Bloomberg.
Uber had $6.6 billion in cash on hand at the end of the quarter, not including the $500 million it recently raised from Toyota Motor Corp. or its $2 billion debt offering.
When the listing happens, I'll be finding some spare cash to get involved. Given how much my family spends on Uber rides, I would be a fool not to own the stock.