Uber appears to be setting lower expectations for its mammoth IPO. After its bankers previously floated a share price range valuing the company at between $90 billion and $100 billion, it appears they shifted it downward by about $10 billion. Bloomberg reported Thursday the currently discussed range is $44 to $50 dollars a share. Two weeks ago, the range was $48 to $55. If the stock trades at the lower end of the new range, it would mean investors are still willing to give Uber a bigger valuation multiple than Lyft, even though Uber is growing more slowly.
No doubt the valuation adjustment is due in part to the frosty public-market reception that Lyft’s stock has received in its first few weeks of trading. Another factor could be the reaction to worsening margins noted in Uber’s IPO prospectus.
Uber will try to price itself correctly to avoid the negative news cycles that hit Lyft. In the meantime, valuations could rise for both companies if Lyft’s first-quarter earnings report—which is likely to come out before Uber goes public—exceeds expectations. The initial range for Uber’s IPO could be made official as soon as tomorrow.