Ride hailing giant Uber raises US$8.1 billion in US IPO priced near bottom of range in bumpy week for markets

Uber Technologies raised US$8.1 billion in its initial public offering after pricing shares near the bottom of their marketed range.

The ride-hailing company sold 180 million shares for US$45 each, according to a statement on Thursday. It had marketed them for US$44 to US$50 apiece.

Based on the amount of stock outstanding after the offering, the IPO price gives San Francisco-based Uber a market value of US$75.5 billion, just below its last private market value of US$76 billion. The fully diluted value, including restricted stock units and other shares, could be about US$82 billion.

Uber has prioritised selecting shareholders – particularly institutional investors – that it thinks will hold on to the stock for a long time, according to a person familiar with the matter. The company is hoping to avoid the tumultuous first weeks of trading in rival Lyft, whose shares fell below its US$72 IPO price within days of listing and closed 23 per cent below that price Thursday.

“We view Uber’s conservative pricing as a smart and prudent strategy coming out of the box as it clearly learned from its ‘little brother’ Lyft, and the experience it has gone through over the past month,” Wedbush Securities analyst Dan Ives said. Uber’s biggest competitor briefly dipped below its last private value of US$15.1 billion in premarket trading Thursday, before rebounding to close at US$55.18 for a valuation of about US$15.8 billion.

Even at the low end of the price range, Uber’s listing is set to be among the 10 largest US IPOs of all time and the biggest on a US exchange since Alibaba Group Holding Ltd.’s US$25 billion global record holder in 2014, according to data compiled by Bloomberg.

Still, it’s a considerable climb down from earlier projections: Last year, bankers jockeying to lead the offering told Uber it could be valued at as much as US$120 billion in an IPO.