Uber Turns to Saudi Arabia for $3.5B Cash Infusion

Sincere question, can someone explain to me a plausible scenario at this point by which early investors actually receive a payout even slightly commensurate with their supposedly incredible investment?

For example, how can someone in the seed round genuinely be able to cash out given the unbelievable amount of dilution that has taken place. What are the plausible scenarios where this occurs?

EDIT: Specifically asking in the context of a valuation that seems to way outstrip any plausible IPO (or complete takeover) valuation, and almost certain liquidation preferences that accompanied these later institutional rounds.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#6

Post by Retric » Wed, Jun 01, 2016, 9:02 PM UTC

Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#7

Post by breitling » Wed, Jun 01, 2016, 9:05 PM UTC

craigvn wrote: post #3

Blood money while they continue to execute people in the street.

Get off your moral high-ground. We (USofA) still continue to execute people as well.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#8

Post by slg » Wed, Jun 01, 2016, 9:05 PM UTC

Putting aside whatever you think about Saudi Arabia or its government, it is inarguable that this move will be highly controversial. It makes me wonder why Uber pulled the trigger on this knowing there will be a backlash. Wouldn't it have to be because of pricing? I wonder if the leadership of Uber simply didn't want to see any dip in the valuation and Saudi Arabia was the only one out there willing to meet that price. It makes me think that $62.5 billion value is completely unrealistic.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#9

Post by sintaxi » Wed, Jun 01, 2016, 9:05 PM UTC

Retric wrote: post #6

Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model.

I tend to agree however its completely plausible the raising is used just to chase after new markets.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#10

Post by koolba » Wed, Jun 01, 2016, 9:07 PM UTC

Retric wrote: post #6

Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model.

> Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model.

If someone is willing to give you $3.5 billion dollars I'd argue you've got a solid business model. Either that you're just really good at raising capital.