The US ride-sharing giant Uber has finally filed its much-anticipated updated S-1, in which it stated that the company would be pricing its shares at $44-50 for its initial public offering.
The on-demand transportation company plans to Sell 180 million common shares, and Uber is planning to raise somewhere between $7.9 billion to $9 billion ahead of its IPO debut on the New York Stock Exchange bourse, helping the company to reach a valuation figure of $84 billion. This is in the middle of the $80-90 billion range that was projected by trade analysts earlier. Some even expect that Uber can raise as much as $10.4 billion if everything turns out smoothly on their IPO debut date.
There were some new revelations in the updated S-1 documents of Uber. First of all, PayPal has stated that it would invest $500 million into the company and this would be done as a private placement, which is part of an extension of a strategic partnership between the two companies, in which they aim to develop some new digital wallet services for American consumers. Second of all, Uber has stated that it expects to post a loss of somewhere between $1 billion to $1.1 billion for the first quarter of the 2019 financial year, which is a huge swing from the net income of some $3.7 billion which it made over a year ago.
PayPal has been involved in a partnership with Uber and the PayPal is providing payment services in the Uber app since the start of 2013 and PayPal is also its lead processing partner in the U.S. and Australian markets.
This is just the second big investment that Uber has announced in April before its IPO debut. Last week, the company had announced a strategic $1 billion worth of investment from Japanese firms SoftBank, and Toyota and also the auto parts maker Denso, which has valued the company at over $7.25 billion.
Uber has stated that this $500 million placement from PayPal is also being made at the same valuation as the IPO price range.
Uber has said that in April of 2019, the company had entered into a stock purchase agreement with the PayPal, Inc. The company, where PayPal will purchase $500 million worth of common stock from Uber and it will be made as a private placement which will be pegged at a price per share that is equal to the IPO price of Uber. The sale of these shares as a private placement is currently subject to some closing conditions, which includes the closing of this offering and it is also waiting for certain regulatory approvals. With this private placement, both Uber and PayPal aim to extend their global partnership through the execution of an addendum which would be made to their existing commercial agreement. Uber and PayPal aim to explore technologies for future commercial payment collaborations, which includes the development of their digital wallet system on the Uber app.
Dan Schulman, who is the CEO and President of PayPal, has stated about this strategic partnership that this is another significant milestone on their journey to be a platform partner of choice, and they aim to assist global commerce by connecting the world’s leading marketplaces and payment networks. This is also the second biggest investment that PayPal has made by PayPal after its eBay spin-out. The biggest investment that PayPal made was in MercadoLibre in the Latin American market, where the company invested $750 million in March of 2017.