Last Friday Uber finally announced its plan to go public with a valuation in the $90-100B range. Since then investors have been struggling to wrap their minds around the true value of the leader in rideshare space. The only competitor to peg a valuation against is Lyft, and their stock has dropped 28% since coming out of the gate with a $22B market cap, and it’s only been public for 15 days.
The dilemma for investors is easy to understand. On one hand Uber will be priced at the combined market value of GM and Ford – for a company who’s never built a car in their history and loses almost $2B a year in operating expenses. This would normally be a hard red light for all but the heartiest investors.
On the other hand The Street may succumb to a bad case of FOMO, since Uber is in the best position to transform the entire concept of personal transportation. Ten years from now you’d hate to be the one investment banker who passed on the IPO for the “Google of Transportation”, right?
There’s no firm IPO date yet, so the final go public value will still bounce around a bit. But when Uber does IPO it will be the most watched and speculated about tech debut since Facebook went public back in May, 2012.