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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

#41

Post by valuearb »

aetherson wrote: post #26
valuearb wrote: post #20

Earlier quoted context omitted.

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…

I never said their valuation is justified, just that their business model works. The costs of providing their booking service is small compared to the revenues it generates. The only question is how much do they have to spend on end user marketing and driver recruitment.

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

#42

Post by KeepTalking »

msoad wrote: post #14
seanmcdirmid wrote: post #8

Earlier quoted context omitted.

But Uber isn’t limited to the USA and Canada. At least, not like how Didi is limited to china: https://www.uber.com/country-list/ https://en.m.wikipedia.org/wiki/Uber_(company)#Legal_status_...

Yes, but scale of countries like Bahrain doesn't make a dent. Also, in each of those countries Uber has a competition that is usually more successful than Uber. That's not true in Brazil and Mexico and that's why Didi is rushing there!

IMHO - Brazil and Mexico are dominated by Cabify and EasyTaxi.

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

#43

Post by jdavis703 »

hinkley wrote: post #36

In Japan, company struggles are first blamed on the management chain. Not the employees, not bad luck. The people in charge. If new management can’t sort things out then it must be they workers. This also appear to apply to subsidiaries in other countries. Given the way Uber has been going, next year is going to get interesting. Given Uber’s struggles, if SoftBank follows the playbook, they won’t touch anything for a…

SoftBank has a minority, 15% stake. Will they really have enough authority and juice with the other board members to execute a boardroom coup?

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

#44

Post by bsiemon »

rpmcmurphy wrote: post #34

If you want a forecast of how ridesharing companies will settle out, tear the route map out of an inflight magazine. There is no global airline, but many regional airlines that provide international connectivity to other regional airlines. It makes sense that each major region will have 2 or 3 dominant operators including local taxis. In the long term, a local operator will have advantages due to better local knowled…

Does the cost in maintaining/paying for hub airports factor into why airlines are regional? For example southwest has service over most of the US because they use the older/cheaper airports vs United has hubs that don't heavily overlap with American. I don't see the parallel with ride sharing here.

I think Uber/Lyft can take over the whole US since they don't need to maintain much supporting infrastructure. Plus they can get economy of scale in marketing.

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

#45

Post by robhunter »

Are they not just buying common stock or Series Seed/A/B stock from existing investors?

I'm under the impression this is a totally different class of stock than the $70B valuation round?

Common stock at a $49B valuation is entirely different from preferred stock at a $70B valuation with what I'll assume includes a lot of "fine print" around pro-rata and/or liquidation preferences.

Feels a little clickbait-y to say the valuation took a haircut when we're talking about different classes of stock.

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

#46

Post by wpietri »

pedrosorio wrote: post #32
wpietri wrote: post #29

Earlier quoted context omitted.

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…

Uber has been making offers in RSUs for more than 2 years: https://www.reddit.com/r/cscareerquestions/comments/3u5asj/u...

Ah, good point. Here's confirmation of that from the NYT: https://www.nytimes.com/2017/03/03/technology/uber-said-to-c...

For the people who have options, some could still be entirely wiped out by this, but it's not as big a problem for new hires.

It's still a problem, though. As the Reddit discussion makes clear, people are benchmarking against things like Google. The equivalent equity package from Google 2 years ago would have gained 30% in value, while the Uber one has lost 30%. Assuming $200k in equity from each place, that's $260k for Google and $140k for Uber, or nearly a 2x difference.

That would sure make me think about jumping ship.

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

#47

Post by NelsonMinar »

What's the purpose of this $1B investment at a $70B fictional valuation given that everyone knows the actual valuation is $48B? Does it make the tax accounting better for someone somehow?

I'm with discordianfish in saying only 30% down sounds better than it could have been for Uber.

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

#48

Post by KeepTalking »

rtx wrote: post #40
msoad wrote: post #14

Earlier quoted context omitted.

Yes, but scale of countries like Bahrain doesn't make a dent. Also, in each of those countries Uber has a competition that is usually more successful than Uber. That's not true in Brazil and Mexico and that's why Didi is rushing there!

Uber has around 50% market share in India. That alone is the third biggest market in the future.

Uber's main competitor in India is OLA cabs.

India is ripe for Ride sharing cabs. In major metros, OLA (specifically OLA Select) is the ride of choice for middle class youth. With free wifi and one hour work commutes common, the ola ride becomes time to get emails and secretarial work taken care of.

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

#49

Post by xyzzy_plugh »

robhunter wrote: post #45

Are they not just buying common stock or Series Seed/A/B stock from existing investors? I'm under the impression this is a totally different class of stock than the $70B valuation round? Common stock at a $49B valuation is entirely different from preferred stock at a $70B valuation with what I'll assume includes a lot of "fine print" around pro-rata and/or liquidation preferences. Feels a little clickbait-y to say th…

Indeed, they're investing at the 70B valuation and buying existing shares through the tender offer, at a discount.

Given that the latter shares are being sold by existing stockholders, it doesn't seem fair to call this a down round.

I'd expect their valuation to remain the same.

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

#50

Post by kurthr »

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.…

The success of Didi in China has been interesting. They have largely co-opted the taxi pools in Beijing/Shanghai/Shenzhen by allowing you to bid/pay the driver to pick up riders. It has changed dramatically in only a few years.

Although locals tell me it is illegal you can wait over an hour and a hundred green-lit taxis before one will stop to pick-up someone without an app that is willing to bid a few yuan. Train stations and airports have cues where you can still get a ride, but don't count on hailing a car in the evening even in a busy downtown district.

As a result they control all of the taxi business and all of the ride-shares. I must say not having to transact in cash is nice.

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