On Friday, 10 May, the world's most anticipated initial public offering (IPO) is set to hit the American stock market. Ride-hailing giant, Uber, will be offering 180 million shares to the public in between the $44 and $50 price range. If demand reaches the top of that range, it will value Uber at almost $84 billion.
Will it prove to be the best investment of the year? Or the worst? Only time will tell. However, some big-name investors have already announced they plan to invest. PayPal Holdings has agreed to invest $500 million while a newly formed entity for Uber's autonomous driving efforts from the Softbank Vision Fund, Toyota Motor Corp and Denso Corp, plans to invest $1 billion.
Let's take a look at the Uber IPO in more detail, the company's financials and how you could possibly take advantage in the biggest IPO for years.
Who is Uber?
Uber is a ride-hailing company that was launched back in 2009. While most people know Uber to be the equivalent of an on-demand taxi they can order from their smartphone, the company has a sprawling business empire which also includes:
- New Mobility - a bike, scooter and water taxi service already operating in several different countries
- Uber Eats - a food delivery business which competes with Grubhub and Deliveroo
- Uber Freight - a new venture to provide on-demand freight services to the shipping industry
Of course, most investors will want to know just how healthy Uber's books are, so let's take a look.
What are Uber's financials like?
Investors have their hands full when looking at Uber's financials. The company produced an IPO prospectus that was over 290 pages long, filled with commentary and information before the financial section even begins!
As Uber has so many different business areas, the financial results may seem scattered. For example, its 'core platform adjusted net revenue' consists of the revenue from just ride-sharing and Uber Eats which is only a handful of their overall business.
Having said that, Uber offered some financials which highlighted that overall revenue rose to $11.3 billion in 2018 from $7.9 billion a year earlier. A 43% increase will certainly satisfy most investors. However, while revenues are up on a year by year basis, quarterly revenue is falling and there are signs of decelerating growth.
How to Invest in the Uber IPO
Investing in an IPO is certainly a very interesting prospect. After all, it could be the chance to invest in high-growth companies like Facebook, Netflix or Tesla. In most cases, investors look a the future prospects of a company rather than the current financials. How else can you explain the 2,000% share price growth of Tesla since its IPO in 2010 and the fact it still does not make a profit!
While some other IPOs have gone well this year, investors will be looking at the most recent Lyft IPO, which is considered to be Uber's little brother. While shares in Lyft surged more than 21% on the day of the IPO, it is now trading down around 16% from where it first opened. Of course, there are some major differences in the two companies as Uber has a much bigger global presence.
Taking a long term view, as other institutional investors are, is essential when deciding whether or not to invest in the Uber IPO. Through Admiral.Invest, you will shortly be able to invest in Uber shares after the IPO volatility has settled, as well as:
- Invest in thousands of stocks and ETFs from 15 of the largest stock exchanges in the world.
- Open an account with just €1 and invest from just $0.01 per share with minimum transaction fees of just $1 on US stocks.
- Receive free real-time market data, with no delays, at no extra cost.
- Create a stream of passive income by collecting dividend payouts.
- Use the world-renowned MetaTrader 5 multi-asset class trading platform.
Uber's IPO has gathered a huge amount of attention from all around the world and its shares will be available to invest in shortly. Click on the banner below so you can learn more about the benefits of an Admiral.Invest account so you can be prepared.
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
- The analysis is published for informative purposes only and is in no way to be construed as investment advice or recommendation.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
- Each of the Analysis is prepared by an independent analyst (Jitan Solanki, Freelance Contributor) based on personal estimations.
- To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
- The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies herein or that losses in connection therewith shall be limited.
- Any kind of previous or modelled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.