Let’s Talk About Uber’s IPO
This article was originally published here
It’s May 2019, and Uber is expected to go public this week. Uber has been private for a staggering 10 years. It is one of the silicon valley’s so called Unicorns , companies valued at $1 billion or more. While Uber seems to have a substantial amount of cash on hand, about $6 billion or more, it is still going to the public markets to raise money.
Startups like Uber usually target public markets because of the opportunity it presents to raise more capital to support their operations. This capital can be in the form of bonds, similar to what Tesla TSLA did, plus other lucrative options. Moreover, it helps the company get more recognition in capital markets, not that Uber needs it, but it also strengthens a company’s image for investors as a long term option, think Amazon as a technology company.
Putting aside the hype about Uber’s IPO , this IPO is also a very good opportunity for early investors of Uber to cash out on their investments and get mad returns on their investments, especially for Travis Kalanick who helped found the company in 2009 and owns 7% of Uber. Travis is no longer Uber’s CEO after sexual misconduct scandals in 2017 which ended his saga by appointing Dara Khosrowshahi, former Expedia CEO , as the company’s CEO in a desperate attempt, by the board, to fix the company’s culture.
