Uber valued at $82bn in IPO as Market Jitters and Lyft Woes take a toll

Uber Technologies  priced its initial public offering on Thursday at the low end of its targeted range to value the company at $82.4bn, hoping the conservative approach would let it avoid the market chaos suffered by rival Lyft.

Uber, the most high-profile US listing since Facebook  seven years ago, raised $8.1bn, pricing its IPO at $45 per share, compared with an expected range of $44-$50 per share.

Uber's IPO came

against a backdrop of turbulent financial markets, fuelled by the trade dispute between the US  and China, as well as the plunging share price of Lyft, which is down 23% from its IPO price in late March.

Uber's valuation is almost a third less than the valuation of up to $120bn that its investment bankers predicted in 2018.

The IPO was oversubscribed, but Uber settled for a lower price to avoid a repeat of Lyft's IPO in late March, which priced strongly then plunged in trade. Uber also wanted to accommodate big mutual funds, which unlike hedge funds put in orders for a lower price.

Lyft's stock slumped nearly 11%  on Wednesday to a record closing low of $52.91, well below the $72 per share IPO price, after the ride-hailing company reported a $1.1bn quarterly loss.

Some still consider the stock overpriced.

"Uber is basically Lyft 2.0. Good model, growing sales. But, yet again, here comes California math once more. It is still losing a ton of money," said Brian Hamilton, a tech entrepreneur and founder of data firm Sageworks. "If you buy, you are buying a bull market, not a company," he added.

In meetings with potential investors the past two weeks, Uber CEO Dara Khosrowshahi argued that Uber's future was not as a ride-hailing company, but as a wide technology platform shaping logistics and transportation.

The company is hoping this pitch, coupled with any fear of missing out what is expected to be the biggest IPO of 2019, will support demand.

The IPO pricing is a balancing act for Uber's team of underwriting banks, led by Morgan Stanley, Goldman Sachs  and Bank of America Merrill Lynch, to negotiate a good price while leaving some upside to ensure the stock trades up on its market debut.

Uber lost $3.03bn in 2018 from operations, and reported a net loss attributable to the company for the first quarter of 2019 of about $1bn on revenues of roughly $3bn.

• Reuters