SoftBank and Saudi Arabia are the two big winners of the IPO of Uber



They are the main backers of the SoftBank Vision Fund, Uber's largest shareholder with a 16.3% stake. The sovereign wealth fund of Saudi Arabia also holds a direct interest of 5.3%.

Likewise, he is about to take advantage of a successful IPO: SoftBank's Managing Director, Masayoshi Son. The billionaire pursues an aggressive strategy of investing in startups that, he hopes, will become industry leaders. Uber's IPO could be the big victory his son needs to convince skeptics and search for more business.

"This will give them more dynamism in this type of investment," said Daniel Ives, managing director of equity research at Wedbush Securities.

Bet

SoftBank took a risk in December 2017 when he decided to pay more than 7 billion dollars in Uber, the bet could help reform a promising company in disarray.
Uber was valued at $ 48 billion at the time but had produced a constant flows of negative securities. He faces criminal investigations, a trial of Google (GOOGL) Autonomous car unit on allegedly stolen trade secrets, and internal investigations of the company's toxic culture.
SoftBank figured this advice changes and new leadership could turn the company around. To set the stage, former CEO Travis Kalanick agreed to give up some of his control.

"They were there when Uber needed it," said Ives, calling the Vision Fund a "pivot" that allowed Uber to stay together at a pivotal moment.

In return, SoftBank was awarded two seats on the board. A SoftBank executive told Reuters on Friday that the company had left these seats open pending a review of the national security of the United States. The government has reviewed SoftBank's investment but not the positions of the board, he said.
The public investment fund of Saudi Arabia, which invested in 2016, also has a seat on the Uber board occupied by his General Manager Yasir Al-Rumayyan. The fund generated $ 3.5 billion in June 2016, which Kalanick called a "vote of confidence" at the time.
SoftBank CEO Masayoshi Son has bet more than $ 7 billion on Uber. The bet bears fruit.

Gain

The Uber IPO will probably be one of the largest ever conducted by a technology company. The company is fulfilling its ambitions not only in carpooling, but also in the transport, restaurant and logistics sectors.

This would be good news for SoftBank, Son and the sovereign wealth fund of Saudi Arabia.

SoftBank expects its money to give Uber enough weight to keep its competitors at bay until the use of the app becomes a habit for most people, according to Bill Aulet, professor at MIT Sloan School of Management.

Once that happens, the platform will be able to add pilots and runners at any time, he said.

Of course, there are still big risks. Uber lost $ 1.8 billion in 2018, an unprecedented amount for a business on the verge of becoming public. And actions of Lyft (LYFT)Uber's main competitor quickly fell below the price of its IPO after it was released last month. They hit record lows this week.

Uber is also still grappling with serious legal problems. In its IPO, the company quotes "a number of investigations, inquiries and requests for information from the US Department of Justice and others." US and foreign government agencies, "which she says could hurt the company.

For SoftBank, the promise seems to outweigh the potential disadvantages.

The IPO is a boost for the Vision Fund and will stimulate future fundraising efforts, said Steven Kaplan, professor of entrepreneurship and finance at Booth School at the University of Chicago.

SoftBank's bet on Uber is also covered by the company's holdings in other stimulus services, including Chinese companies Didi Chuxing and Grab of Southeast Asia.

– Seth Fiegerman and Sara Ashley O 'Brien from CNN Business contributed to this report.


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