Saturday, March 9, 2019

UBER I.P.O.

     Uber ride share is popular.  Soon, you will be able to invest and become popular, too.  Become part of an IPO.

     IPOs are the very first sales of stocks issued by a company to the public.

     Uber was founded, and has been private since 2009.  Uber has been funded via the founders, friends, and professional investors. Early investors, venture capitalists, and angel investors.  An IPO will provide an opportunity for the taxi service to expose itself to public stock trading.

     Uber- "What did you say?"

     Open up your app. Become a rider.  From a rider perspective, Uber is an inexpensive rideshare service.  Modern day convenience lends you to private driver services toward your destination of choice. A nearby driver arrives to pick you up within minutes. The entire transaction is convenient and online.

     Wash your car.  Go online.  From a driver perspective-

     Uber is the rideshare service which enables you to be your own boss.  It provides exceptional pay, and tips are a plus.  UBER.COM

     Uber would prefer to go public in a positive, stable market. CRUNCHBASE.COM

     Uber completely scheduled its IPO. Tech stocks have consistently climaxed toward their expectations.  Uber is in line and getting ready to ride the stock-roller-coaster. 

     The company is reportedly planning on going public in the second half of the year. What can we expect from an Uber IPO?  Details are exiguous.  The ridesharing company could go public on a $120 billion valuation.

     IPO Valuation-

     An IPO valuation is based on income, book value of equity, sales, research/development, industry price-to-sales ratios, inside retention, investment banker prestige, and price-to-earnings ratios.  CORPORATEFINANCEINSTITUTION.COM

     These are steps a company must undertake to go public via an IPO process:

Select a bank

Due diligence and filings

Pricing

Stabilization

Transition

     Critics have have accepted Uber as is, but the net worth, founded through a variety of valuations from around the cyber world, has not been.  FORBES.COM

     Ridesharing company Uber is one of the world's most valuable startups.  It's driven by soaring revenue growth and expansion.  Untapped expansions into new markets.

     In one analysis,  Uber's value was estimated to be $120 billion.  $120 billion was gauged using key revenue tactics, including:

Monthly Active Riders (No. of riders who request a ride at least once a month)

Number of Rides Per User (Annual)

Gross Revenue Per Ride (Total fare per ride in driver, before Uber )

Net Revenues ( Revenues recognized by Uber after driver earnings, incentives, promos, refunds)

     Uber’s monthly active riders base grew from 50 million in 2016 to 75 million in 2017, with the number of rides called by each rider also trending higher. We expect monthly active rider growth to remain strong in 2018, as Uber doubles down on emerging markets, taking total rides delivered to around 5.25 billion for 2018 and over 6 billion in 2019. The bull case assumes that monthly active riders over 2019 will rise to 125 million, with the number of rides per rider growing to 60.

     We expect the company’s gross revenue per ride, which is the total value of the rides billed to customers before Uber takes its share, to remain at levels of around $9 over 2018 and 2019. We forecast its total gross revenue – which is total rides multiplied by gross revenue per ride – to rise to $47 billion and $56 billion, respectively, in 2018 and 2019. Our bull case assumes that gross revenue per rider rises to $10.

     Uber’s net revenue, which is the share that the company takes from gross revenues, declined in 2017. However, the company has been cutting back on driver incentives and the promotions it offers to customers, as it looks to improve its net revenues. We expect the company’s take rate to rise to 23.5% in 2018 and 25% in 2019, translating into net revenue of about $11 billion in 2018 and $14 billion in 2019. Our bull case assumes that the company’s share of revenue rises to 30% in 2019. 

     Investing in IPOs is a good idea.  To invest in every single IPO is not. After all, the course of every single IPO is different. Initial Public Offerings present a convenient platform. This is an opportunity to team up with Uber.  Make an entry into the market with rates at low level.