Friday , August 19 2022

Why Private Investors should be Careful at Uber IPO


ANext Friday, the stock market event takes place this year, and includes all the ingredients needed in the finance world, so we need: an innovative business idea, a disgraceful founder and money, lots of money. $ 91.5 billion, to be precise.

Dennis Kremer

Editor in the "Money & More" section of the Frankfurter Allgemeine Sonntagszeitung.

If everything goes as planned, Uber, commonly referred to as a travel agent, will be worth as much on its IPO. Similarly, Wall Street has not experienced since the IPO in Alibaba in 2014. Even in the worst case, based on the price range for the stock, Uber would still reach about $ 80 billion, raising the question: is the stock market overdo it? Or is Uber a company that only happens once in a generation, as Uber boss Second Khosrowshahi claim?

What can Uber offer to ordinary investors?

A definite answer, looking in it to the future means that you won't be able to give it yourself today. But there are signs. When he founded the Travis Kalanick, along with all his Uber, in 2009, the idea behind him was as simple as it was inventive. Why not take advantage of the fact, both thought that much of mankind can drive more or less a car that can be transferred? Private car drivers can carry people from A to B as well as taxis, cheaper, the basic idea. The app brings drivers and customers together, shared revenue revenue by Uber and the drivers. The idea came first: first of all in America, more and more in the rest of the world. It has 90 million customers in more than 700 cities, writes Uber in the prospectus.

Well-known investors such as the Saudi Arabia sovereign wealth fund or the Japanese soft bank (see graphics) went up with billions. They see the IPO as an opportunity to make specific money about their shares. Uber's founder, Kalanick, who owns nearly nine percent of the company's shares, would also benefit in particular. But what prospects can Uber offer to ordinary shareholders who can buy the stock from next Friday?

If one weighs sober advantages and disadvantages against each other, the disadvantages are very apparent at the moment. This is about the prospectus, which, for the first time, gives detailed figures on the situation. So, Uber has made an operational loss of about three billion dollars last year. This reflects the difficulties that come with the innovative business model: Uber has to spend a lot of money in several parts of the world to attract new drivers and new customers with special discounts.

In the US, Uber has also grown into a serious competitor with Lyft, which has already joined the end of March. The stock market has gone. Lyft has also benefited from the fact that Kalanick, the founder of Uber, now has a tendency to fail to comply with the public. This led, as well as corporate culture, described as misleading to the fact that the founder of the company, which eventually, was retreating, costing Uber but according to its own data hundreds of thousands of customers.

However, these are snapshots. The most important question for potential shareholders is another: Will the company generate enough profit in the future, even if it doesn't succeed at the moment? At least, the quarrels seem to wander with many European countries where the taxi lobby defends its monopoly firmly since the more mixed chief executive of Khosrowshahi Uber.

However, according to many experts, the future of Uber will not deal with markets where Uber has been banned from using private drivers as taxi deputies. Uber has not even been offering the food business for some time. But in the field of self-driving cars. Martin Hermann, fund manager, of the private bank Berenberg, said: "Uber must strive for a world leading position in autonomous driving. T If self-driving cars were to become dominant in the future, Uber could save huge costs on the one hand. After all, so far the company has had to share a trip revenue with the drivers.

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