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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

#51

Post by module0000 »

icebraining wrote: post #4
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.

Is a 30% haircut really enough to make the investment worthwhile if Uber doesn't make it?

It depends how they hedge that investment. A 30% discount on the basis means you can be very aggressive with your hedge positions.

I'd say it's way too early to speculate yet...but somewhere within softbank, a risk manager is already planning on the whole deal to fail(that's his/her job), and how to keep the effects of that failure from being catastrophic.

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

#52

Post by eddieplan9 »

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…

This. It’s not uncommon to price the common shares differently in tender offers. Facebook did almost the same thing in 2009: DST bought preferred share at $10B valuation and then tender offer at 6.5B [1]

[1] http://kara.allthingsd.com/20090713/facebookers-start-cashin...

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

#53

Post by xocyabencl »

xyzzy_plugh wrote: post #49
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.

If the valuation didn't change, and the common stock is fairly priced, then we should stop calling the valuation $70B. Under that model, Uber was never worth $70B.

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

#54

Post by rtx »

KeepTalking wrote: post #48
rtx wrote: post #40

Earlier quoted context omitted.

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.

As some one living in one of those metros. I have never used Ola. They always seem to have less cabs.

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

#55

Post by u320 »

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.…

Uber's relative failure in the highly deregulated Swedish taxi market to me indicates that their competitive advantage is avoiding regulations. So it's not clear why "to much regulations" would be a problem for them.

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

#56

Post by seanmcdirmid »

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!

Didi isn’t in South, Central, or North America yet, so talking about how successful they are doing there isn’t very meaningful. Didi will also face competition in those countries as well when and if they decide to enter those markets, not to mention they’ll have to aggressively rebrand (even their name might have to change).

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

#57

Post by anodari »

KeepTalking wrote: post #42
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!

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

Uber is strong here too.

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

#58

Post by unreal37 »

gst wrote: post #17
alextheparrot wrote: post #10

Earlier quoted context omitted.

This seems kinda odd, because one of the main plus points for me is that Uber worked somewhat internationally. I use Lyft only, but that was a key differentiator for me actually. As a more interesting question, is there any difference between saying SoftBank is competing with Uber and that SoftBank has hedged against an Uber investment? I feel like the latter may be more the framing of these investments.

Same here. In the States I mostly use Lyft, but internationally it's easier to just use the Uber app instead of first figuring out which other options are available. In many cases installing the local apps doesn't even work because they are limited to their own local app stores. One of the next steps for those companies is probably to get roaming agreements with each other: When I'm in a country where, e.g., Uber doe…

Cologne is the fourth largest city in Germany. Was surprising that Uber didn't work there.

Uber "seems" everywhere, but is largely North American.

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

#59

Post by xyzzy_plugh »

xocyabencl wrote: post #53
xyzzy_plugh wrote: post #49

Earlier quoted context omitted.

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.

If the valuation didn't change, and the common stock is fairly priced, then we should stop calling the valuation $70B. Under that model, Uber was never worth $70B.

No, that's not how that works. The preferred share and common share prices converge towards a liquidity event, like an IPO, when preferred shares are converted to common shares.

It's expected that common shares are worth less than preferred shares. After all, the preferred shares could be paid out at value in, e.g. in the event that the company is sold for far less than the current valuation, and the common shares would be worthless.

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

#60

Post by unreal37 »

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 difference, the $24, comes out of driver's pockets.

And also, Uber loses money on every ride. That $26 ride to the airport cost Uber $30. :)

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