Uber is planning to pitch shares to investors at an initial range of $44-$50 (about R600-R720) each, lower than its bankers had previously hoped but still putting it on track to become Silicon Valley's biggest initial public offering (IPO) since Facebook.
At the top end of the range, Uber would raise as much as $10.4bn from the IPO.
The ride-hailing pioneer's IPO is one of Wall Street's most widely anticipated in years, as a herd of highly valued technology companies, including Zoom and Pinterest, rush to the public markets.
Uber's initial pricing, revealed in an updated filing on Friday, is higher than its most recent private funding round but below a range suggested to some investors just last month.
Uber's conservative pricing could rise following meetings with investors as it approaches next month's listing on the New York Stock Exchange, but it follows an underwhelming stock market debut by rival Lyft, which is trading at more than 20% below its issue price.
In addition to its public listing, Uber is also selling about $500m worth of stock to PayPal in a private placement at the IPO price, it said in Friday's filings.
PayPal processes payments for Uber in the US and several other countries. As part of the investment, the companies are expected to announce an expanded global commercial agreement and their intention to explore future collaborations including the development of Uber's digital wallet, according to the filing.
Friday's initial pricing marks the start of a marketing blitz by company executives and their bankers. The final terms may change based on investor interest during the road show.
Last month, Uber told some investors that it could price its shares in a range of $48 to $55, valuing the company between $90bn and $100bn.
Uber has been seen as taking a conservative approach to its pricing, given the large size of its deal, coupled with investor concern about the ride-hailing business after the heavy losses reported by the company and Lyft.
At the proposed range, Uber would still rank as the second-largest IPO by a US tech company after Facebook, which raised $16bn in 2012, according to Dealogic.
Uber's IPO documents have revealed a company spending heavily to maintain market share as growth slows.
Revenue rose 42% to $11.3bn last year, while operating losses narrowed from $4.08bn to $3.03bn, excluding gains from the sale of businesses in Russia and Southeast Asia.
The company burnt $2.1bn in cash in 2018, down from $4.5bn in 2016.
However, the pace of ride-hailing revenue growth has slowed in recent months due to competitive pressures to subsidise fares and reward drivers.
That, along with increased spending to bulk up new ventures such as the Uber Eats food delivery service, its Freight trucking arm, and electric bike and scooter rentals, has driven a resurgence in adjusted losses.
Uber CEO Dara Khosrowshahi, who joined in mid-2017, and four other top executives stand to benefit through options comprising nearly 4-million shares as an incentive for sorting out the company and moving it quickly to an IPO.
However, the stock benefits only pay out if Uber's stock market value stays at about $120bn for at least three months. The top management team has until 2023 to hit its performance target.
The Financial Times..