Uber Technologies raised US$8.1-billion in its initial public offering after pricing shares near the bottom of their marketed range.
The ride-hailing company sold 180 million shares for $45 each, according to a statement on Thursday. It had marketed them for $44 to $50 apiece.
Based on the amount of stock outstanding after the offering, the IPO price gives San Francisco-based Uber a market value of $75.5-billion, just below its last private market value of $76-billion. The fully diluted value, including restricted stock units and other shares, could be about $82-billion.
Uber has prioritised selecting shareholders — particularly institutional investors — that it thinks will hold on to the stock for a long time, according to a person familiar with the matter. The company is hoping to avoid the tumultuous first weeks of trading in rival Lyft, whose shares fell below its $72 IPO price within days of listing and closed 23% below that price on Thursday.
“We view Uber’s conservative pricing as a smart and prudent strategy coming out of the box as it clearly learned from its ‘little brother’ Lyft, and the experience it has gone through over the past month,” Wedbush Securities analyst Dan Ives said. Uber’s biggest competitor briefly dipped below its last private value of $15.1-billion in pre-market trading on Thursday, before rebounding to close at $55.18 for a valuation of about $15.8-billion.
Even at the low end of the price range, Uber’s listing is set to be among the 10 largest US IPOs of all time and the biggest on a US exchange since Alibaba Group’s $25-billion global record holder in 2014, according to data compiled by Bloomberg.
Still, it’s a considerable climb down from earlier projections: last year, bankers jockeying to lead the offering told Uber it could be valued at as much as $120-billion in an IPO.
That’s partly because, after waiting a decade to go public, the most highly valued start-up in the US is set to make its market debut amid less-than-ideal conditions. US stocks fell for a fourth day on Thursday, leaving the S&P 500 index on pace for its worst week of the year as trade tensions escalated between the US and China. Uber shares are due to begin trading on the New York Stock Exchange Friday, under the ticker UBER. — Reported by Eric Newcomer, (c) 2019 Bloomberg LP