IPO

Morgan Stanley To Oversee Early Trading For Uber IPO

Uber

Morgan Stanley will take on the role of stabilization agent for Uber when it goes public, according to a report by Bloomberg.

A stabilization agent, also know as a syndicate trading manager, has the job of making sure the first hours of trading go smoothly. It also comes with the responsibility of managing the additional shares that are allotted to underwriters, in what’s called a greenshoe option.

The role is attractive to banks because there’s potential for more commissions on trading. Morgan Stanley, Goldman Sachs and Bank of America are the lead underwriters in Uber’s filing with the U.S. Securities and Exchange Commission. Allen & Co., Citigroup and Barclays are also involved.

Morgan Stanley also helped Uber with the prospectus for the IPO, which could be filed this month. Uber could be valued as much as $120 billion, and the listing is going to be one of the biggest of the year, analysts say. The listing will net millions of dollars for the institutions helping Uber.

Last week, Uber rival Lyft went public on the Nasdaq Global Select, and after an initial jump, the shares fell below the $72 offering price on Monday. On Thursday (April 4), they closed at $72.

Uber’s roadshow, where the underwriters pitch the IPO to potential investors, is expected to begin this month. Morgan Stanley previously led Uber’s first funding round in junk debt markets in 2016. The $1.15 billion loan was found to have gone against leverage guidelines, but Morgan Stanley returned to help Uber in a future round, helping the company raise $2 billion in high-yield bonds.

In other Uber news, the company expanded its Ride Pass program, a subscription service that lets riders pay a monthly fee for discounted rides on all Uber platforms, including electric bikes, scooters, UberX, Uber Pool and Express Pool, according to reports.

When the program was first introduced last year, the cost was $14.99 per month. Riders in Orlando, Miami and Austin will still pay the introductory price, but riders in new cities will pay $24.99 per month. The program was originally launched in five cities: Los Angeles, California; Austin, Texas; Orlando, Florida; Denver, Colorado; and Miami, Florida.

“Whether it’s a daily commute or a night on the town, we want to give riders more ways and more confidence to get from A to B with consistent, dependable prices they can count on,” Uber said.

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