from the gotta-pay-for-those-Volvos-somehow dept.
SoftBank has finally secured a large stake in Uber that devalues the company and reduces former CEO Travis Kalanick's influence on the company:
Japanese tech giant SoftBank Group has bought a 20 percent stake in Uber, completing a months-long process, according to the Wall Street Journal. The move drops Uber's value by about 30 percent from around $70 billion to $48 billion — a reflection of the trouble that the ride-hailing company has experienced across 2017.
More important than the valuation change, though, could be the impact SoftBank's new stake will have on the influence former CEO Travis Kalanick still has on the company. Kalanick resigned from his post earlier this year after a number of scandals, but still maintains a seat on the company's board of directors, where he is surrounded by allies and controls 16 percent of the voting power.
The SoftBank deal triggers new governance terms at Uber that were approved by the company's board in October, though. The size of the board will expand from 11 to 17, which dilutes the power Kalanick wields. Two of those seats will go to SoftBank.
Also at Recode, CNBC, and Quartz.
Previously: SoftBank to Invest Billions in Uber
SoftBank Knew of Data Breach at Uber
SoftBank Devalues Uber by 30% With Latest Offer
Related Stories
Uber board strikes agreement to pave way for SoftBank investment
Uber Technologies Inc's warring board members have struck a peace deal that allows a multibillion-dollar investment by SoftBank Group Corp to proceed, and which would resolve a legal battle between former Chief Executive Travis Kalanick and a prominent shareholder.
Venture capital firm Benchmark, an early investor with a board seat in the ride-services company, and Kalanick have reached an agreement over terms of the SoftBank investment, which could be worth up to $10 billion, according to two people familiar with the matter.
The Uber board first agreed more than a month ago to bring in SoftBank as an investor and board member, but negotiations have been slowed by ongoing fighting between Benchmark and Kalanick. The agreement struck on Sunday removed the final obstacle to allowing SoftBank to proceed with an offer to buy to[sic] stock.
Also at TechCrunch.
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SoftBank learned of a data breach at Uber while it was attempting to invest in the company:
Uber Technologies Inc said on Thursday that it discussed a massive data breach with potential investor SoftBank Group Corp ahead of going public with details of the incident on Tuesday.
The ride-hailing service is trying to complete a deal in which the Japanese company would invest as much as $10 billion (£7.52 billion) for at least 14 percent of Uber, mostly by buying out existing shareholders.
"We informed SoftBank that we were investigating a data breach, consistent with our duty to disclose to a potential investor, even though our information at the time was preliminary and incomplete," Uber said in a statement.
"We also made clear that our forensic investigation was ongoing," Uber said. "Once our internal inquiry concluded and we had a more complete understanding of the facts, we disclosed to regulators and our customers in a very public way."
Maybe they should wait for the stock to collapse first.
Also at Bloomberg.
Previously: SoftBank to Invest Billions in Uber
SoftBank thinks Uber is valued over $20 billion too high, although other investors may disagree:
SoftBank is preparing to buy shares of Uber at a price that values Uber at only $48 billion, a steep 30 percent discount rate for ownership in the company, which was last valued at almost $70 billion.
That's in line with what Uber investors were expecting; Recode reported this weekend that the price could be as low as $48 billion or as high as $52 billion. The $48 billion price, confirmed by a person with knowledge of the figure, will however raise concerns about whether the secondary sale will succeed — SoftBank needs to accumulate 14 percent of the company's shares to trigger the so-called "tender offer."
Also at Bloomberg and TechCrunch.
Previously: Alphabet Leads $1 Billion Round of Investment in Lyft
SoftBank to Invest Billions in Uber
Uber to Purchase 24,000 Volvo SUVs for Autonomous Vehicle Fleet
SoftBank Knew of Data Breach at Uber
Uber has exited the Southeast Asian ride-hailing market with a sale to Singapore-based Grab, which also operates in Malaysia, Indonesia, the Philippines, Vietnam, Thailand, Myanmar, and Cambodia:
Uber is selling its South East Asia ride-share and food delivery businesses to regional rival Grab. The move marks a further retreat from international operations for Uber, after it sold its China business to local rival Didi Chuxing. Both firms describe the deal as a win for their passengers, but analysts warn it could mean higher prices.
Grab is South East Asia's most popular ride-sharing firm with millions of users across eight countries. Under the terms of the deal, Uber will take a 27.5% stake in Singapore-based Grab. Uber's chief executive, Dara Khosrowshahi, will also join Grab's board.
SoftBank is the biggest investor in both companies, and could also engineer an Uber exit from India, where it competes with Ola:
[...] real victory unquestionably belongs to Masayoshi Son's SoftBank Group Corp., the single-biggest investor in both companies. As I wrote earlier this month, by engineering a retreat for the U.S. company before any more bloodletting for market share, Son ensures that six-year-old Grab will emerge as an early champion in a winner-takes-all business.
A faster path to profit for Uber could also boost its valuation ahead of a planned IPO next year. But at what cost? Having already surrendered China to Didi Chuxing, beating a retreat from Southeast Asia is a precursor to perhaps losing India, the lone remaining jewel in Uber's once-flourishing Asian empire.
In India, once again, SoftBank is the largest investor in Uber's main rival, Ola. Competition between the two apps has become ridiculous. For all the PR gobbledygook on how happy Uber and Ola drivers are, the reality is that many who took out bank loans to acquire new cars are hurting badly. There's a glut of ride-hailing cars; wages have collapsed. Banks are collecting on "DUD," -- my moniker for "distressed Uber debt" -- by repossessing vehicles.
Uber's new CEO, Dara Khosrowshahi, says there will be no more exits from global markets (in addition to China, Uber also left Russia). But SoftBank may continue to pursue a strategy of exiting emerging and less profitable markets in exchange for large stakes in competitors.
Related: SoftBank's $80-100 Billion "Vision Fund" Takes Shape
SoftBank to Invest Billions in Uber
SoftBank Devalues Uber by 30% With Latest Offer
SoftBank Acquires 20% of Uber While Massively Devaluing It
SoftBank and Toyota team up to develop services powered by self-driving vehicles
SoftBank is getting into self-driving car services after the Japanese tech giant announced a joint-venture with Toyota in its native Japan.
SoftBank is invested in Uber and a range of other ride-hailing startups like Didi in China and Grab in Southeast Asia, but this initiative with Toyota is not related to those deals. Instead, it is designed to combine SoftBank's focus on internet-of-things technology and Toyota's connected vehicle services platform to enable new types of services that run on autonomous vehicle tech.
Called MONET — after 'mobility network' — the joint venture will essentially assign autonomous vehicles to various different "just in time" services. That just in time caveat essentially means more than on-demand. SoftBank suggests it'll mean that services are performed in transit. That could be food prepared as it is delivered, hospital shuttles that host medical examinations, or mobile offices, according to examples given by SoftBank.
Related:
Toyota Invests $1 Billion in AI and Robots, Will Open R&D Lab in Silicon Valley
A Company Called Nauto Has Partnered With Toyota, BMW to Log Driver Habits
SoftBank Acquires Boston Dynamics and Schaft From Google
Saudi Arabia Planning $500 Billion Megacity and Business Zone
SoftBank to Invest Billions in Uber
SoftBank Acquires 20% of Uber While Massively Devaluing It
Japan Teams up With Uber, Airbus and 19 Others on Flying Taxi Plan
Saudi Arabia Shelves Work on SoftBank's $200 Billion Solar Project
(Score: 5, Interesting) by stretch611 on Saturday December 30 2017, @06:24PM (1 child)
Lets face it, the sooner that the Uber board transitions power away from the older board member including Kalanick the better it is for Uber. (ARS recently put Uber on their 2018 deathwatch [arstechnica.com]. IMHO, complete removal of the old board including Kalanick would be best for the company.
Lets see, Uber treats its dirvers like crap, doesn't properly vet its employees, allegedly steals tech by hiring people from its competitors (Waymo), spies on its competitors, has computer programs to deny services to possible government employees to avoid regulations, hires private investigators to discredit people suing them of sexual discrimination... and that is all from memory... without a search.
How much of that crap needs to get out before people avoid using Uber like the plague? (answer: its already started.) Uber needs to get rid of its trash, and that has to happen before it can grow more, otherwise the infection has the chance to kill it completely.
Now with 5 covid vaccine shots/boosters altering my DNA :P
(Score: 0) by Anonymous Coward on Saturday December 30 2017, @11:18PM
In civilized places, where the gov't hasn't completely sold its soul to the Oligarchs, there's a sign of light.
The European Court of Justice (ECJ) Declares Uber a Transport Service [soylentnews.org] for example.
It bothers me when Thom Hartmann (a committed Liberal Democrat) says on his radio show that he uses Uber.
As informed as he is, he should be aware of that operation's labor abuses.
I can imagine that guy crossing a picket line. 8-(
-- OriginalOwner_ [soylentnews.org]
(Score: 5, Interesting) by ledow on Saturday December 30 2017, @06:35PM (2 children)
It's not worth 48bn, let alone 70bn.
"On a global basis, the privately-held company lost $2.8bn last year as revenues climbed to $6.5bn"
Even if it DOUBLED revenue, without costing a penny more, it would take $3.7bn - that means they just paid for over ten years of double-revenue profits on a company that - if that trend doesn't happen - stands to sit and haemorrhage money for the next 17 years at the rate it's currently doing so.
The fact that it "was" worth 70bn and is now ACTUALLY worth 48bn tells you exactly what you need to know - don't be the guy who buys it next because you'll probably end up having to sell it at half-the-price you paid for it originally. It's "who was left holding the hot potato".
And do they have a business model they can protect in any significant way? No. Just a brand. That's turning bad for them.
I give it five years before they're worthless, change hands for a 1000th of this (millions instead of billions) and nobody really uses them any more.
(Score: 2) by FatPhil on Saturday December 30 2017, @07:14PM
I was going to post: "Devalue": Nope, it's called a "correction" in economic terms.
Is there a bubble in the use of the word "bubble" yet?
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by TheRaven on Sunday December 31 2017, @08:30AM
You could be right, but then people said the same thing about Amazon: they were making a loss on each sale, but making it up in volume. Uber is similar to Amazon in this way, they may not be the best taxi service, but they're convenient and they work almost everywhere. They've basically been spending a few billion VC dollars to become the app that a huge number of people think is synonymous with taxi booking, just as Amazon spent a huge amount becoming the web site a huge number of people think is synonymous with buying stuff online. There are a couple of routes to profitability for them:
The first is if they can get self-driving taxis to work. This will remove their labour costs entirely, and they would be profitable already if they weren't paying drivers.
The second is to be in a position to raise prices and keep customers. They're already more expensive in some places. A colleague did an analysis a few years ago of public taxi data in New York and compared against the spot price for Uber and found that on average it was $1 more expensive to take Uber than a normal taxi. To do this, they either need their users to become so accustomed to the idea that Uber == taxi that they don't bother to compare prices, or they need to keep undercutting regulated taxis to the point that taxi companies go out of business.
The biggest danger to Uber is a bottom-up competitor, where existing taxi companies invest in a shared booking system that gives you the convenience of Uber and guarantees a regulated taxi ride.
sudo mod me up