According to a company statement, Uber Technologies Inc. will announce its intention to enter the public stock market at the end of April 2019. An initial public offering (IPO) and still unconfirmed first business day is to be 10 May, 2019.
In recent months investors’ interest in the shares of technology companies has increased significantly, as evidenced by the recent successful entry into the public equity market by the IPO of Lyft Inc. (NASDAQ-LYFT). On the first trading day its shares could bring shareholders up to a maximum profit of 21% in one business day. NASDAQ-LYFT’s subscription price was US$72 per share and on its first trading day closed by more than 8 percent appreciation, but declined in the next days. Analysts compare this phenomenon to Facebook Inc. (NASDAQ-FB), where several months after the IPO, the share was sold below its subscription price. In nearly seven years of NASDAQ-FB’s active share trading, the share has already increased its price and gained profit of several hundred percent.
Companies such as Lyft Inc., and Uber Technologies Inc., are operators of an alternative passenger transport network in major world capitals, currently they mostly operate in the US, in more than 300 major US cities including San Francisco, Los Angeles and New York. The two companies use smartphones of their customers to receive their orders, provide an alternative taxi service, but at significantly lower prices than standard operators. In Europe, including the Czech Republic, where both companies operate, their introduction of shared driving through mobile applications has sparked a wave of resistance and protests especially from traditional taxi operators.
Both of these ridesharing companies are based in San Francisco, California, USA. As people use their mobile phones more and more, in particular smartphones with Internet connectivity, it is possible for these companies to make profit. With this in mind, this is why these companies were founded in the new millennium, Uber Technologies Inc. in March 2009 and Lyft Inc., three years later in June 2012. Unlike its Lyft competitor, Uber has actively engaged in the commercial use of so-called flying vehicles and launched tests on these vehicles that are able to take off and land vertically.
According to the US Securities and Exchange Commission (SEC) Uber Technologies Inc. stated: “We expect our operating costs to increase significantly in the foreseeable future and that we do not expect to achieve profitability”. However, other economic data suggest that customers’ interest in shared taxi services is increasing year by year. Since its inception, the company has made more than 1.5 billion paid rides and currently employs or cooperates with more than 3.9 million drivers worldwide. The company earned about US$11.3 billion last year, 42.1% more than in 2017. However, the total loss over the last 10 years shows an accumulated deficit of US$7.87 billion.
The overall estimate of the company’s so-called market capitalization varies with respect to the estimated share price rise after the first trading day on the NYSE (New York Stock Exchange). According to the 2018 initial estimates of Wall Street Journal analysts and economic bulletins, it is valued at $US76 billion. Currently, investment bank financial strategists’ estimates are ranging from US$90 billion to US$120 billion. Uber Technologies Inc. is currently expecting a US$10 billion return on its shares through the IPO, which analysts say is equivalent to a 10-15% stake in the company.
The actual subscription price estimate and exact IPO date has not yet been officially published, but according to unconfirmed reports, the share price should be in the range of US$47-49 per share and some business rapporteurs estimate the first business day to be around 3 May 2019 and the latest date is on Friday 17 May 2019. According to renowned global investment bank financial strategists, it can be assumed that IPO of Uber Technologies Inc. should be highly successful, and especially in the next investment horizon, the price of this share can be expected to rise significantly.