INTERNATIONAL – Uber has been told by banks that it could be a $120 billion ( R1.7 trillion) company when it goes public. Investors will be the ones who decide, though.
That eye-popping valuation was sketched out to the company by Morgan Stanley and Goldman Sachs Group, said people familiar with the matter who asked not to be identified because the discussions were private.
Pitches from firms jockeying to convince a company that they’re the best to lead the deal are typical in the IPO process.
But if large consumer tech IPOs of the past couple years are any guide, that 12-digit number should be taken with a grain or two of salt. Both photo-sending app Snap Inc. and Chinese smartphone-maker Xiaomi had eyes on big valuations, only to see their numbers cut by half when it came to actually sell shares to investors.
Snap’s public market capitalization was seen as being as high as $40bn five months before its listing last year, a person familiar said at the time. Its March 2017 IPO ended up valuing the company at about $20bn, which has since sunk to $9.3bn.