About IPO Why the low valuation

Uber is likely to be rated lower than expected

The IPO of the transportation service broker Uber is getting closer and closer. The company is scheduled to place its shares for the first time at the beginning of May. Accordingly, Uber wants to take eight to ten billion dollars with the IPO. The shares are to be offered for 44 to 50 US dollars, reports Bloomberg, citing people familiar with the matter. If Uber pegs its stocks at the lower end of that price range, the company's valuation would be just above its latest funding round.

Uber dwarfs Lyft

At the time, Uber was valued at $ 76 billion. Now Uber is aiming for revenues of 80 to 90 billion euros. However, analysts had expected that the driver service broker could achieve a valuation of up to 120 billion dollars when it went public - but this expectation will likely disappoint Uber. According to insiders, the company opted for a cautious share price in order to be able to raise the price later if there is high demand.

Even if Uber "only" takes eight billion dollars with the IPO, the company dwarfs its direct competitor Lyft: Lyft had raised 2.34 billion dollars in its IPO, the largest IPO so far this year.

Heavy losses, but strong growth

Uber is starting its IPO from a weakened position. The company suffered losses of three billion dollars in 2018, according to the prospectus. In the past three years, the operating losses totaled over ten billion dollars. However, the company attracts investors with strong growth, as Heise Online reports: In 2018 alone, sales rose by 42 percent year-on-year.

Uber has repeatedly struggled with image problems in recent years. In addition, some of the company's services have been banned in many countries. Uber is also not allowed to offer its UberPop and UberBlack services in Germany. Vigorous protests against the company, especially from the taxi industry, had formed, which in some countries even degenerated violently.