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Investor concern over Uber's stagnant growth is satisfied by the advertising company's focus on the size and scope of its business as part of its much anticipated initial public offering.
Dara Khosrowshahi, Executive Director, described Uber's structural advantage as a platform for various modes of transportation, ranging from porterage and public transit to the delivery of food and goods, relative to to "monoline" rivals targeting a single company, according to an investor the IPO roadshow will stop in New York on Tuesday.
Uber, Silicon Valley's biggest darling to hit public markets in 2019, has accumulated huge losses over the years by spending capital on a fierce battle for global expansion.
But rather than Uber's lack of profits or cash-flow loss, investors' questions at Tuesday's presentation focused on its growth rates, competitive dynamics and market shares, explained the investor. "I do not think the word" profit "has appeared once."
The substantial losses recorded by this year's technology IPOs made some investors think twice. Questions about the profitability of Lyft, its smaller US rival, Lyft, listed on the stock market at the end of March, weighed on the stock, which trades below the issue price.
On Tuesday, hundreds of investors gathered in the Ballroom of New York's Mandarin Oriental Hotel in downtown Manhattan to hear Uber executives, including the company's lead lawyer. plead their case.
Security has been heightened that usually during such events due to the fear of attracting drivers who were demonstrating and attempts to journalists to enter. The invited investors were informed of the locations of the big group meetings only three hours in advance, according to people familiar with the subject.
During a lunch of pasta and sandwiches, participants watched a video and listened to Mr. Khosrowshahi's remarks before a question and answer session with Nelson Chai, Chief Financial Officer, and Tony West, General Counsel. , according to the people present.
Investors have questioned the slowdown in growth in recent quarters, which, according to Uber, was due to increased competition that forced it to increase subsidies on driver rates and rewards. The company announced that it would spend "aggressively" in the short term to defend its leading position in many cities where it operates.
"The main question facing investors is, given the size of the market, how long can Uber maintain strong growth rates," said the investor present.
Mr. Khosrowshahi recalled the lessons from his tenure as CEO of Expedia, namely that global Internet companies are the ones that succeed in win-win-type markets, what he thinks about transportation on demand, said the investor.
Mr. West asked questions about how Uber is changing its approach to working with regulators as it enters new markets, such as Germany and Japan, where monitoring strides is strictly regulated. Mr. West, former senior PepsiCo attorney and former head of the United States Department of Justice, has been closely badociated with cleaning up Uber's legal and regulatory entanglements as a result of a long history of tactics. aggressive and a culture that the company itself has described as "toxic" in its prospectus for the IPO.
Mr Khosrowshahi spoke about the changes that have occurred in the company since he became managing director in 2017, after ousting the co-founder, Travis Kalanick, as a result of a series of scandals.
Uber's merger and acquisition strategy was also discussed, following a number of recent transactions in the perspective of its offering. These include the $ 3 billion purchase from its competitor Careem in the Middle East, as well as securing a $ 1 billion investment worth of its $ 7.3 billion standalone unit. The company urges investors to consider the autonomous value of this business, as well as its minority stakes in other international companies, by putting a global value on Uber.
Uber announced Friday its proposed price range of $ 44 to $ 50 per share, providing a valuation up to $ 91.5 billion.
According to one investor, demand for the offer was strong after Uber's first major presentation to London's high-end Claridge Hotel on Monday.
Leaders and bankers are expected to attend another group luncheon in Boston Wednesday and San Francisco on Friday, according to a schedule sent to investors. The company's executives will travel to the Midwest next week before returning to New York on May 9, where they should award a stock price. The title is expected to start trading on the New York Stock Exchange on May 10, according to someone close to the record.
The attention paid to the high valuations sought by Uber and rival Lyft on public markets has intensified the strained relations between companies and some drivers who demand higher wages and better working conditions.
Service drivers plan to strike on May 8 in several US cities, including Los Angeles, Chicago, Philadelphia and San Francisco.
Uber and Morgan Stanley, Goldman Sachs and Bank of America Merrill Lynch, the main underwriters of the initial public offering, declined to comment.
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