Uber set to hit the road for year’s biggest IPO

Bloomberg

Over the past decade, Uber Technologies Inc. proved itself to be one of the most prolific young fundraisers ever. It pulled together more than $20 billion from private investors. After burning through more than half that amount in just the last three years, Uber will soon see whether it can recreate that magic on the stock market.
The ride-hailing company entered the final stretch of the ultimate capital-raising exercise, when it disclosed details of an initial public offering expected to net the company and its backers another $8 billion or more. Executives and bankers plan to hit the road next week to promote the stock to public investors and then ring the bell on the New York Stock Exchange floor on May 10, when the shares start trading, according to a plan obtained by Bloomberg.
Uber Chief Executive Officer Dara Khosrowshahi and his lieutenants will be joined by longtime allies from Morgan Stanley and Goldman Sachs Group Inc. on the roadshow, which starts on Monday. Over the years, the two banks helped Uber arrange private debt offerings, convertible loans and equity sales. The company will take its expansive pitch — car rides, food delivery, autonomous cars, electric scooters, bicycle rentals — from London on Monday to New York on Tuesday, and then the company’s hometown of San Francisco on Thursday.
The projected IPO value is slightly lower than some early projections. Morgan Stanley and Goldman Sachs had pitched Khosrowshahi last year on an IPO value of as much as $120 billion. That also happened to be the price at which the CEO and at least four deputies would earn a substantial performance bonus. Instead, Uber is currently aiming for $84 billion, or $91.5 billion on a fully diluted basis, though that number could change depending on demand.
Uber hopes to avoid the fate of its smaller US rival, Lyft Inc. Lyft has failed to maintain its IPO price, and the stock is down 21 percent. Uber intends to take a more cautious tack and manage investors’ expectations, said people familiar with the matter who asked not to be identified because the discussions were private. The approach, though, means it could leave easy money unclaimed, said Bryan Routledge, associate professor of finance at Carnegie Mellon’s business school: “The problem with an IPO is you typically sell your shares too cheap.”
An Uber video to promote the stock lacks the Wes Anderson-style levity of Lyft’s production, but it crams in a similar number of heavy-handed metaphors to convey a business in forward motion. It’s a half hour of executives talking up the company’s prospects while walking — sometimes practically running — towards the camera.
The IPO will be the biggest in a busy year on US markets but not the most unusual. That honour may very well go to Slack Technologies Inc., which made its offering paperwork public.