Uber employees are taking advantage of the rare opportunity to convert their paper shares of Uber into cold, hard cash as SoftBank, the Japanese technology giant, buys 17 percent of the ride-hailing app’s outstanding shares.
SoftBank is paying $33 a share, which represents a 30 percent discount to the company’s most recent valuation at $70 billion, reported Quartz. “Everyone’s been reconnecting to discuss the tender offer,” said Lane Kasselman, a former communications lead for Uber. “A lot of the former employees have been waiting for two to four, even five years, to see liquidity, so it’s pretty exciting.”
In order to be part of the tender offer, the shareholder has to have 10,000 or more shares and be an accredited investor, which is the Securities and Exchange Commission's designation for wealthy investors. What’s more, current Uber employees are only allowed to sell half of their stake, while former employees have no restrictions on their shares.
The stake sale is slated for Dec. 28, although it may not happen if there aren’t enough shares available for SoftBank and a small group of investors to purchase a minimum 14 percent stake in the company.
According to Quartz, Uber is the most valuable technology startup in the world, with its valuation climbing from $3.5 billion to close to $70 billion between 2013 and 2016.
Until 2016, Uber had only given former employees 30 days to exercise their options, which is seen as an unusually short period of time. Options that were exercised by the former employees before they expired were taken back into the company. That changed in the spring, giving ex-employees as long as seven years to exercise their options, noted the report.
Uber announced its deal with SoftBank in November, saying: "We believe this agreement is a strong vote of confidence in Uber’s long-term potential. Upon closing, it will help fuel our investments in technology and our continued expansion at home and abroad, while strengthening our corporate governance.”