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SoftBank Succeeds in Tender Offer for Large Stake in Uber

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Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#21

Post by Fricken »

QAPereo wrote: post #2

Does anyone really think that Uber has enough runway, or could ever get enough, to last until the necessary level of automation is developed? SoftBank though, between this and their incredibly favorable, conditional loan to Theranos really has an eye for distressed assets! If someone does have a vision for a successful Uber, I’d love to hear it, not to try and pick it apart, just to understand what’s happening.

SoftBank has huge bets in all the global rideshare companies, which includes Grab and Ola as well as Uber and Didi.

The bet is on providing sophisticated transportation logistics in fast growing developing world cities that are currently served by a hodge podge of unaccountable, poorly coordinated small time private transportation companies, and where overwhelmed regional governments are unable to provide sufficient public transportation services.

It's an addressable market of potentially billions of people who will never own cars, and and currently have limited options.

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#23

Post by thisisit »

> Other members of SoftBank’s bidding group are likely to buy part of the remaining shares on offer, the people said.​

Any ideas on who are these other members?

As for the question on whether this is a haircut on valuation is an interesting one.

This is not exactly raising money from a VC rather through a secondary offering, so Uber can still claim there is no down round. It's just that people in public bidding sold on a discount. But, that is fine too as common stock from early rounds are actually worth less than common stock from later rounds.

https://www.bloomberg.com/view/articles/2017-11-16/softbank-...

> Since Uber's stock doesn't trade on an exchange, there is no public record of its value changing from day to day, and it can point to its last fundraising round as its still-current "official" valuation, whatever has happened since. But if it does a new round at a lower price, it won't be able to play that game any more. And as Uber gets closer to an initial public offering, that game becomes more important: It's harder to argue for an $80 billion IPO after a $50 billion private down-round.

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#24

Post by Someone »

davewritescode wrote: post #9
QAPereo wrote: post #2

Does anyone really think that Uber has enough runway, or could ever get enough, to last until the necessary level of automation is developed? SoftBank though, between this and their incredibly favorable, conditional loan to Theranos really has an eye for distressed assets! If someone does have a vision for a successful Uber, I’d love to hear it, not to try and pick it apart, just to understand what’s happening.

They probably could if they focused on profitable markets. They’ve been burning money because they’ve been obsessed with growth as opposed to profitable growth.

That’s what they seem to be doing. http://www.businessinsider.com/uber-sells-auto-leasing-busin...:

”Uber has found a buyer, and a partner, for its auto-leasing business that was losing more money than expected”.

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#26

Post by aetherson »

valuearb wrote: post #20
QAPereo wrote: post #2

Does anyone really think that Uber has enough runway, or could ever get enough, to last until the necessary level of automation is developed? SoftBank though, between this and their incredibly favorable, conditional loan to Theranos really has an eye for distressed assets! If someone does have a vision for a successful Uber, I’d love to hear it, not to try and pick it apart, just to understand what’s happening.

Uber should easily be profitable without driverless cars. Uber's cost to book rides is pennies, its share of ride revenues is dollars. It's likely profitable or close in north america now. The naked capitalism analysis was childishly biased, completely done without access to the necessary detail of their financials. Uber under Kalanick poured massive amounts of money into accelerating international market expansion a…

Uber trumpets it and crows when they come close to profitability in markets. You're nuts if you think that Uber is profitable in North America.

There is clearly some profitable ride-sharing business in the general Uber model, but it remains unclear that there is a profitable ride-sharing business with enough gross revenue to justify a 10x unicorn business. Uber's main problems with profit margins aren't Uber Eats or even driverless cars, it's in getting their ride volumes up.

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#27

Post by joncrane »

QAPereo wrote: post #2

Does anyone really think that Uber has enough runway, or could ever get enough, to last until the necessary level of automation is developed? SoftBank though, between this and their incredibly favorable, conditional loan to Theranos really has an eye for distressed assets! If someone does have a vision for a successful Uber, I’d love to hear it, not to try and pick it apart, just to understand what’s happening.

Do you see Lyft exceeding Uber's success?

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#28

Post by 1undo »

chx wrote: post #15
msoad wrote: post #5

A few observations: Softbank has stakes in Didi, Didi has stakes in Uber, Uber has stakes in Didi, with this Softbank got stakes in Uber. Uber is mostly successful in North America and Southern Americas. Didi is obviously successful in China and will expand to Southern Americas soon. Europe is not an important market for these companies. Too much regulations and good public transportation won't allow them to thrive.…

> If Uber is limited to US and Canada I fervently hope it's the US only. I will talk to my MLA and show him a nice collection of news about Uber in hope they will not allow them to operate their scam in Vancouver.

How is it a scam? It gave me a ride to the airport for $26 bucks. I took a cab once and it cost over $50 bucks. My need some tweaks here and therem but overall its a great service for customers

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#29

Post by wpietri »

discordianfish wrote: post #13
scarmig wrote: post #6

How often do companies come back from down rounds? It seems like any company willing to take a down round is also fine with taking a publicity hit and a hit to morale, which suggests it's in an even worse spot compared to what the devaluation would suggest. Is there precedent that suggests even that SoftBank will come out on top from this?

Maybe I’m alone but my initial reaction was: “oh 30% doesn’t sound that bad”.

It's really bad for anybody who has options. The last time Uber's valuation was this low was 2 1/2 years ago. I don't know how Uber did employee equity, but if it was options with a valuation based on the numbers we're seeing in public, then somebody who joined 2 years ago would just have had their equity stake drop to $0. And in some sense it's negative, in that even if the valuation goes up modestly, their stake is still worthless. After putting up with all the internal bullshit and the bad press, that'd be quite a kick in the gut.

If that's what Uber is doing internally, then in practice I imagine they're going to have to give out a lot more options to keep everybody happy.

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#30

Post by toomuchtodo »

1undo wrote: post #28
chx wrote: post #15

Earlier quoted context omitted.

> If Uber is limited to US and Canada I fervently hope it's the US only. I will talk to my MLA and show him a nice collection of news about Uber in hope they will not allow them to operate their scam in Vancouver.

How is it a scam? It gave me a ride to the airport for $26 bucks. I took a cab once and it cost over $50 bucks. My need some tweaks here and therem but overall its a great service for customers

The rates Uber charges are unsustainable, funded with VC money and underpaying drivers, hence posters comment that Uber is a scam.

Uber’s play is to wait out taxis going out of business and then charge you $50.

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