Sources have revealed that Uber is planning to launch its initial public offering (IPO) in April. According to Reuters, Uber will issue its required public disclosure next month, then start its investor roadshow. Uber declined to comment on the report.
If the reports turn out to be true, Uber’s IPO will come soon after its chief rival Lyft completes its own IPO, which is expected to happen by the end of March.
Lyft made its IPO papers public earlier this month, revealing that the company earned $2.16 billion last year, an increase from $1.06 billion generated in 2017. The company aims to trade on the Nasdaq stock market with the symbol LYFT by the end of this month. While the paperwork didn’t disclose the company’s valuation, Lyft is expected to come in much higher than the $15.1 billion it was valued at in early 2018.
While ridership was on the incline, and Uber reported $50 billion in total bookings for ridesharing and food delivery for the final quarter of the year, revenue growth came in at only 2 percent between Q3 and Q4. In January, it was reported that Uber’s valuation, when it goes public, is likely to be $14 billion less than its most recent private valuation.
The challenge for Uber going forward, according to David Brophy, professor of finance at the University of Michigan’s Ross School of Business, is its losses. This, he noted last month, gives investors pause around whether or not Uber will ever be able to stop subsidizing some markets enough that it can actually put the firm in the black.
“Uber needs to show it can control costs and can make money — basically provide a strong argument that its business model is not broken, and that it can achieve and sustain profitability despite issues with drivers, customers and politicians,” he said.