Uber’s initial public offering is turning into one of the more drama-filled IPOs, at least in the tech world, of recent years. As of Wednesday afternoon, it appeared Uber might price its offering at the mid-point of its pricing range or below, according to both Bloomberg and the Wall Street Journal. While that could change, it suggests demand for the offering is not particularly robust. Hot IPOs typically raise their offering price above what is initially proposed. Uber’s pricing range was already lower than previously expected.
But Uber’s offering has been beset by questions about the company’s huge losses and when it could start to make money. Similar questions have surrounded its smaller U.S. rival Lyft, whose already-depressed stock fell 11% on Wednesday, suggesting that jitters about Uber are worrying Lyft shareholders.
As of Wednesday’s close of $52.91, Lyft shares were a full 27% below their offering price. That values Lyft at just 5.7 times 2018 revenue. Applying the same multiple to Uber values it at around $65 billion, well below its $81 billion expected valuation. Some will quibble with that analysis, as Uber is global in presence and has a food-delivery business, unlike Lyft.
The more interesting issue now is both where Uber prices on Thursday night and where it trades in the next week.