SoftBank Succeeds in Tender Offer for Large Stake in Uber • Hacker News Board

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

#101

Post by dragonwriter » Thu, Dec 28, 2017, 9:15 PM UTC

danjoc wrote: post #97

graton wrote: post #65

If you can't read this article but you have a Facebook account then you can create this as a bookmarklet: javascript:window.location.href='https://m.facebook.com/l.php?u='+encodeURIComponent(window.location.href); Then go to the WSJ.com page and click the bookmarklet, it takes you to Facebook, which then offers to take you to WSJ.com, and then you can read the article.

I have to have Facebook to access the web. Net neutrality.

This has nothing to do with net neutrality, it has to do with the WSJ’s monetization model.and the fact that they selectively bypass it for Facebook as a promotional strategy.

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

#102

Post by brucephillips » Thu, Dec 28, 2017, 9:23 PM UTC

xocyabencl wrote: post #99

sulam wrote: post #92

Earlier quoted context omitted.

Your argument has obvious merit, but the standard is to report on the preferred price, not the common price.

Agreed that the press does go around using this $70B number as a valuation. If the company IPO'd at less than $70B it would similarly be reported as a dud. Recruiters also use the $70B when offering stock options. And I'm sure it feels like a haircut to those employees who just sold their stock at a $49B valuation.

> I'm sure it feels like a haircut to those employees who just sold their stock at a $49B valuation.

Probably not. The strike is likely at a much larger discount.

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

#103

Post by JumpCrisscross » Thu, Dec 28, 2017, 9:26 PM UTC

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…

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

An investor from March 2016 Series G would have sold, to SoftBank, at a lower price per share than that at which they invested. That’s a haircut.

Pricing for preferred versus common, or even different classes of preferred, does diverge. The degree to which it does reflects proximity to liquidation, amongst other factors. A 30% discount for a late stage company between any two stages of preferred is not healthy nor common (no pun intended).

Not sure why every time a story about people selling Uber stock for less than they bought it this naïve financial interpretation comes out in droves.

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

#104

Post by repsilat » Thu, Dec 28, 2017, 9:27 PM UTC

sulam wrote: post #92

xocyabencl wrote: post #88

Earlier quoted context omitted.

Common stock is worth less than preferred. Most stock is not preferred. Therefore there was never $70B worth of Uber stock in existence.

Your argument has obvious merit, but the standard is to report on the preferred price, not the common price.

It's a de facto standard because markets for common stock generally don't exist for private companies. If you're comparing Uber against AirBnb it makes sense to compare valuations based on preferred stock, if you're comparing them to anything in "the real economy" or are interested in the value someone has placed on the company as a whole it's less clear which number is more useful.

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

#105

Post by JumpCrisscross » Thu, Dec 28, 2017, 9:41 PM UTC

eddieplan9 wrote: post #52

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...

> It’s not uncommon to price the common shares differently in tender offers

This tender was not restricted to common stockholders. Some preferred stockholders, who bought in recent rounds, sold down or flat. Practically nobody, if not absolutely nobody, who tendered common stock to DST in 2009 lost money on their original investment. The same isn’t true with Uber.

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

#106

Post by JumpCrisscross » Thu, Dec 28, 2017, 9:42 PM UTC

repsilat wrote: post #104

sulam wrote: post #92

Earlier quoted context omitted.

Your argument has obvious merit, but the standard is to report on the preferred price, not the common price.

It's a de facto standard because markets for common stock generally don't exist for private companies. If you're comparing Uber against AirBnb it makes sense to compare valuations based on preferred stock, if you're comparing them to anything in "the real economy" or are interested in the value someone has placed on the company as a whole it's less clear which number is more useful.

> markets for common stock generally don't exist for private companies

There is a thriving, if shallow, secondary market for the private stock, common or preferred, of companies like Uber.

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

#107

Post by danjoc » Thu, Dec 28, 2017, 9:42 PM UTC

dragonwriter wrote: post #101

danjoc wrote: post #97

Earlier quoted context omitted.

I have to have Facebook to access the web. Net neutrality.

This has nothing to do with net neutrality, it has to do with the WSJ’s monetization model.and the fact that they selectively bypass it for Facebook as a promotional strategy.

Clicked the link. Didn't get content. Get a [Subscribe] button. Click it to choose internet package monthly fee.

It's the exact nightmare scenario Net Neutrality supporters warned us about. Packaged internet. No more free access.

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

#108

Post by Improvotter » Thu, Dec 28, 2017, 10:29 PM UTC

Can we please not post websites that require a paid subscription?

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

#109

Post by marenkay » Thu, Dec 28, 2017, 10:53 PM UTC

dragonwriter wrote: post #98

marenkay wrote: post #62

Earlier quoted context omitted.

The missing $24 were health insurance, car insurance, pension payments for the driver etc. All not being paid. Uber is no ride share service, it is a test project to figure out if modern society will accept a larger lower income working class without any social security, and that is what all investment firms bet on.

> The missing $24 were health insurance, car insurance, pension payments for the driver etc. Car insurance, maybe; car companies don't pay health insurance or pensions either for their drivers, who are also characterized as contractors rather than employees.

That depends on the country. In Europe transportation is regulated, and fees are higher and also arrive at the drivers, since they actually have pensions etc.

Meaning Uber eliminates basically the most prominent achievement of the working class with its service. Turning everyone into an independent contractor eliminates social security. Swiftly.

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

#110

Post by marenkay » Thu, Dec 28, 2017, 10:58 PM UTC

iopq wrote: post #79

marenkay wrote: post #62

Earlier quoted context omitted.

The missing $24 were health insurance, car insurance, pension payments for the driver etc. All not being paid. Uber is no ride share service, it is a test project to figure out if modern society will accept a larger lower income working class without any social security, and that is what all investment firms bet on.

The driver uses that money to pay for his own health insurance and retirement. Contrary to your post, Uber provided me with commercial vehicle insurance when I was driving for them.

That is the problem here. Employed work means sharing the duties of social security between company and employee. Uber moves their payments on your shoulders.

And that point is exactly what makes up Ubers' valuation. Ignoring the questionable ethics of that this should be reconsidered though because comparing to the technical value of their service they are requiring way too many engineers to deliver their services, which is a considerable risk if they grow any further.