Finance, ICT - Uber "May Not" Turn A Profit
Uber is warning that it "may not achieve profitability" as it finally released details of its plan of its initial public offering of stock.
When it lists on the New York Stock Exchange (NYSE), analysts believe shares will cost from $48 to $55, making the offering worth about $10 Billion and valuing the company at US$100 Billion. The ride-hailing and food delivery business says its most recent annual sales rose to $11.2 Billion and losses narrowed to $3 Billion. But in its Securities and Exchange Commission (SEC) filing it also said, "We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability."
The papers acknowledge that the company's hard-charging culture had "created operational, compliance, and cultural challenges and our efforts to address these challenges may not be successful".
Uber is trying to boost investor confidence by "spending about $1 Billion this year on food delivery, freight transport, electric bikes and self-driving cars, capital intensive moves designed to position the company as a broad platform for all-manner of transportation."
Drivers are also rallying and organizing to be recognised as employees instead of independent contractors; if successful, Uber admits it could also adversely affect its business. But the company also spoke of teh bright side.
"Over the past 18 months, we have improved our governance and board oversight; built a stronger and more cohesive management team; and made the changes necessary to ensure our company culture rewards teamwork and encourages employees to commit for the long term," said Chief executive Dara Khosrowshahi in a letter.