Uber has apparently submitted its IPO filing at the same time as fierce competitor Lyft as both aim to float before markets turn.
Ride hailing. It’s revolutionised the way many of us think about and use taxi’s and as much as both Uber and Lyft have somewhat distanced themselves from the “taxi” business due to entrenched interests and historical licencing regimes, everyone knows that’s basically what they are and what they’re competing with. Both firms are somewhat racing against time to hit public markets, Uber perhaps more so than Lyft since it accepted a Softbank ( TYO:9984) investment that carried a proviso that it must file for an IPO by the 30th of September 2019 or lift restrictions on shareholder stock transfers.
So the filing is now out of the way for both companies and the first of many major hurdles has been successfully negotiated. Now comes a frenetic X months involving investment banks, lawyers, accountants, analysts, investors, due diligence, breakeven targets, profitability targets, public scrutiny and more. The IPO process is fraught with pitfalls and it will be down to the advisors and senior managers to guide the companies through the process and to public trading. It’s worth noting that the IPO process itself is separate from public trading in that it is the precursor to allowing anyone and everyone who can buy or sell stock on a stock exchange from being able to call up their broker and get some shares. The IPO is about balancing the needs of the company and its existing investors against wider market demand. Management roadshows to key investors to be courted will lay out strategic plans as well as a likely roadmap to breakeven and ultimately profitability, something which both firms are sorely lacking.
