Morning Markets: The Uber IPO is a go.
Ask a venture capitalist what will happen to startups in a bad macro climate, and they’ll respond that “good companies can always raise.” That common response is an irksome and boring chestnut that says nothing, as what determines “good” is subjective.
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All that VC is saying is that some companies will survive. What insight. There’s a similar saying that comes at the end of a startup’s life cycle, instead of earlier on. It goes like this: “good companies can always go public.” Our prior concerns hold.
But there’s another case that is more interesting. What happens when your company can go public, but perhaps not at the valuation you had in mind? Uber could test that path as the firm intends to list regardless of what goes on in the same markets it wants to tap for new funds and liquidity through an IPO.
In a recent interview with the Wall Street Journal, Uber CEO Dara Khosrowshahi said that his company will go public “when we’re ready, and, hopefully, the markets will be in a good state.” He also noted that every company wants to go out when the markets are in good shape. Naturally.
Uber’s future health isn’t clear. As we saw yesterday, Uber is working to reach larger scale while trimming its losses, a smart strategy for the company in less certain market times. What the company is worth seems to be the remaining question.
The Uber IPO has been the source of years of fascination, as the company’s business has matured, its growth rates slowed, and, perhaps, as the company’s losses begin to come down from the stratosphere.
Uber is expected to go public this year after filing confidentially last year. Whether it or Lyft will get out first is unknown.
Illustration: Li-Anne Dias
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