Uber was viewed as the ultimate “unicorn,” a term for venture-funded companies with private valuations higher than $1 billion. But now the public market has spoken, and its judgment is harsh. More from columnist hiltzikm here:
As we write, Uber is trading at about $38 per share, roughly the level at which it has stabilized since Friday, its first post-IPO trading day. This is a very eloquent price: It speaks volumes about the judgment of venture investors, about the credibility of private-market valuations of companies, and about Wall Street underwriting.
Given the volatility of stock markets, Uber shares could start soaring at any time, or collapse further. At the moment, however, the stock market is saying “Bah!” Any unicorns still in the stable are likely to be marked down before they enter the auction ring. But the market valuation is a sharp reduction from Uber’s putative value during its private-market era, which ended Friday. In that era, the company’s backers were talking about a valuation as high as $120 billion. That was the peak, but starting about five years ago the company’s putative value never fell below $68 billion.
From May 2015 on, Uber sold convertible preferred stock to venture investors on the private market at prices of $40 or higher, including 15 transactions with experienced investors at $48.77 each, totaling about $6 billion.Shira Ovide of Bloomberg observes
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