Uber wanted to IPO with a $120 billion valuation but ran into trouble when some of its biggest shareholders held out for a lower price (UBER)


Uber IPO

Uber wanted to go public with the $120 billion valuation pitched by bankers at Morgan Stanley and Goldman Sachs ahead of its IPO, but the company ultimately listed with a $75.5 billion market cap.
One reason is that institutional investors, many who privately owned Uber stock, didn’t want to buy more shares at the higher price, according to The New York Times.
Uber had taken more than $10 billion from institutional investors and private equity firms, among other investors, according to the report. Many bought their Uber shares at valuations below $61 billion.
So it wasn’t an easy pitch to get the same institutions to buy more stock at nearly twice the price, according to the report.
on the Business Insider homepage.

Uber’s mega IPO would have been even bigger if it weren’t for institutional investors.

The ride-hailing company, which went public last week with a market cap of $75.5 billion, initially tried to garner a $120 billion price tag in its IPO. That’s the valuation bankers at Morgan Stanley and Goldman Sachs pitched to the company at the start of the process.

The Wall Street Journal reported that figure in October, and it held shape until April, when the company told investors it would aim a little lower at a valuation of $100 billion.

The problem: many of the institutional investors who would have bought large amounts of Uber in the IPO already owned shares through private funding rounds. And those investors were resistant to buying more shares at nearly twice the valuation they had intitially invested, according to The New York Times.

Since 2009, Uber had taken more than $10 billion in funding from mutual funds and private equity, among others, according to the Times. Asset managers such as T. Rowe Price, Vangaurd Group, and Tiger Global Management helped the …read more

Source:: Business Insider

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