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Uber Books Big Losses In Q3

As SoftBank’s investment is looming on the horizon, Uber is reporting losses on the rise in the third quarter of the year. Uber reported unadjusted net losses of $1.46 billion in the third quarter, according to Reuters reports.  The adjusted figure, according to The Financial Times, is $743m during the third quarter of this year, up 14 percent from the previous quarter. Those figures come care of new documents sent to shareholders, according to the FT.

Net revenue during Q2 was $2 billion — a 21 percent increase from the Q2 result of $1.66 billion — with gross booking clocking in at $9.7 billion, compared with $8.74 billion in the second quarter.

While Uber has reported losses throughout its run as the world’s most successful and valuable start up, until Q3, those losses were showing signs of decline.  That widening, instead of shrinking, of the loss margin follows what has objectively been a rough year for Uber — which saw its CEO ousted under a cloud of various scandals and the disclosure of a hack that Uber had taken great pains to hide.  That hack apparently exposed the data of 57 million people. It also faces a newly resurgent Lyft, which has picked up marketshare in recent months.

Uber is now very likely to enter into a complex investment deal with a SoftBank-led consortium that will invest between $7bn and $10bn in Uber. A large sum, to be sure, but one that represents a big discount for those buyers, who are offering to pay $32.97 a share — a price that would decrease Uber’s $60 billion valuation by 30 percent.

“SoftBank and Dragoneer have received indications from Benchmark, Menlo Ventures, and other early investors of their intent to sell shares in the tender offer,” the company said in a statement.

That deal may change — Uber can reject the offer if they deem it too low, and the buyers’ consortium can raise their buy price as part of the negotiation.

But — facing widening losses — Uber may prefer to take the haircut (and the corporate restructuring that goes with it) as it tries to get back on track for 2018.

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