Guide: Uber’s share price returns to mid-2015, investors lose money, and Silicon Valley enters a reflective mode.
Source 丨 21st Century Business Herald (ID: jjbd21)
Listing has always been a myth of making a night of wealth, but the capital market’s largest IPO in recent years, the first day of Uber’s listing, has caused investors in the primary market to suffer huge book losses.
For the entire Silicon Valley venture capital industry, this is undoubtedly an unforgettable day.
At 11:50 am on Friday, Uber’s IPO opened at $42 on the first day, down about 6.667% from the issue price of $45. It closed down 7.6% and the market value “shrinked” to $69.7 billion, down from $76 billion in the last private placement.
But the investors who suffered losses are far more than the last round of financing. The closing price of $41.55 has been significantly lower than the company’s valuation after December 2015.
In other words, from the end of 2015, the Silicon Valley elite who supported Uber’s losses and expanded the market, ushered in not double the investment value of the IPO, but up to 15% of the book loss. According to Uber’s IPO documents, the amount of funds raised at the end of 2015 was as high as $17 billion.
17 billion investment suffers from book losses
Uber has experienced a three-hour inquiry and its $42 opening price is still being sold. Uber started trading less than 10 minutes, the stock price fluctuated lower, the daily high touched the issue price of 45 US dollars, the daily low approached 41 US dollars, and the deepest drop of 8.8% during the day.
For the Saudi Public Investment Fund, which invested $3.5 billion in mid-2016, the post-marketing price has caused its book loss to be as high as $500 million. For the last round of investor Softbank, it has not yet suffered losses because it invested U.S. $6.6 billion in Uber at a three-fold valuation of $33.
According to the chart provided by The Information, investors after the F round are obviously in the book loss. Although Softbank and Saudi funds account for more than $10 billion in late financing, at least $6 billion is invested in Uber at prices above current market value: no doubt most of this comes from Silicon Valley. .
Uber’s declining listing week has undoubtedly caused Silicon Valley to reflect.
“This is undoubtedly a signal,” said Silicon Valley investor Tim O’Reilly, an entrepreneur who entered the entrepreneurial circle in the 1990s. “Uber is the most sought-after company in the private market, and now it’s back to the soil, it can really explain some problems.”
Matt McIlwain, executive director of the Seattle-based investment agency Madrona Venture Group, said today’s share price performance suggests that many times the private market has miscalculated the company.
The British “Financial Times” quoted Capital Innovations’ chief investment officer Michael Underhill as saying that Uber’s poor performance on the market may sound alarms for other high-value and unprofitable Silicon Valley giants. He believes that the Uber listing is more like a departure opportunity for former private investors, a huge loss, while using a serious subsidy to frantically expand the revenue side, this business model is not sustainable.
In addition to investors, Uber’s employees are directly related to the market value. According to Silicon Valley technology media The Information report, for the employees who joined Uber in the past three years, most of them use the price of 48.77 US dollars per share, and also limit the trading within six months. Obviously, the book value of these employees’ equity has also fallen by more than 10%.
Early return on investment is up to 3,000 times
The unsatisfactory listing can’t hide the gains of early investors and entrepreneurs.
Sam Altman, chairman of Silicon Valley’s well-known incubator YCombinator, said Uber’s listing dilemma is a wake-up call for late investors, but for early investors, “it should be a day of rejoicing.”
In the ten years since its establishment, Uber has raised more than 28.5 billion U.S. dollars. Among the investors are Bezos, which is also famous, and Steve Russell, a continuous entrepreneur. The Saudi sovereign fund, which was run on the train last year, also has 100,000 dollars in nine years. The Founder Collective Fund with a return of three thousand times.
The Information reports on the investment and returns of some early investors.
First Round Capital: Initial financing of $500,000 in 2010, and continued investment with the latter. A total of 15 million US dollars was invested, and the current market value is about 2.6 billion US dollars.
Book return: nine years is about 1720 times.
Lowercase Capital: Initial investment of 300,000 US dollars, and continued to vote later. The total investment is 2.45 million US dollars, and the current market value is about 2 billion US dollars.
Book return: 840 times in nine years.
Founders Collective: According to The Information, Founder Collective invested $100,000 in the early days and received 10 million shares. According to an insider, its realized and unrealized total market capitalization is about $300 million.
Book return: about 3000 times .
Sequoia Capital: Initial investment of $25,000, and a small investment last year with Softbank.
Book return: 65%.
Menlo Ventures: After the B round, the investment was 26.5 million US dollars, and the later round D re-investment.
Book return: 44 times.
Google Investment: 13 years of investment, all kinds of cooperation between the two sides.
Book return: 10 times in six years.
Goldman Sachs: In addition to helping finance, Uber is investing $5 million in b-round financing. The current market value of these investments is about 600 million US dollars.
Book return: seven and a half times 120 times
Bezos: According to Wyatt Investment Research, Bezos invested more than $37 million in Uber B-Series financing in 2011. According to the “Information News” report, the stake is estimated to be close to 400 million US dollars.