Published: Fri, April 12, 2019
Markets | By Erika Turner

Uber reveals heavy losses as it files to go public

Uber reveals heavy losses as it files to go public

The move comes after a lackluster market debut for Uber's United States rival Lyft, which has lost more than 10 percent of its value since its IPO last month.

"We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability", the company said.

The massive filing shows Uber has been generating the robust revenue growth that entices investors, but also racked up almost $8 billion in losses over its 10 years in existence, which mirrors the same trend challenging Lyft, Uber's main rival in the U.S.

Uber officially filed for an initial public offering on Thursday. That number stood at 91 million in the fourth quarter of 2018, up from 68 million in the same period of 2017 A roster of 29 banks in total signed on to underwrite Uber's IPO Uber is putting aside $300 million to make a one-time cash payout to 1.1 million qualifying drivers Uber Chief Executive Officer Dara Khosrowshahi's compensation will be in part tied to Uber maintaining a full diluted equity value of $120 billion Entities affiliated with Softbank Group Corp. are Uber's largest shareholder with 16.3 percent of the company.

The unveiling comes four months after Uber took its first step toward its initial public offering with a confidential filing. If successful, Uber would attain a valuation of between $90 million and $100 billion and the largest tech IPO since Chinese e-commerce business Alibaba in 2014.

The company set a placeholder amount of $1 billion but did not specify the size of the IPO.

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Uber will follow Lyft Inc in going public.

Uber is now expected to begin its roadshow for investors, with an actual flotation expected in early May. The company applied to list on the New York Stock Exchange under the ticker UBER.

Last year, the ride-hailing giant settled a legal dispute over trade secrets with Alphabet Inc's Waymo self-driving vehicle unit. Short interest in the stock now stands at almost 43 percent of free float, according to financial analytics firm S3 Partners, and last week IHS Markit said it was the most expensive bearish bet in the USA equity market.

In its federal filing, Uber warned of the fierce competition it faces on that front from rivals such as Tesla and Google's Waymo, who it said could introduce autonomous vehicles earlier than Uber.

One advantage Uber will likely seek to play up to investors is that they are the largest player in numerous markets in which it operates. Analysts consider building scale crucial for Uber's business model to become profitable.

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