Pushing aside concerns about the stickiness of the ride-sharing business model and a steady decline in Lyft’s (NASDAQ: LYFT) share price, Uber is expected to make the registration of its initial public offering (IPO) publicly available tomorrow, April 11, signaling the beginning of one of the biggest tech market debuts in history.
According to a Reuters report, the ride-sharing company will seek to sell roughly $10 billion in stock. Reuters also confirmed the expected timing of the IPO registration.
If successful, Uber would attain a valuation of between $90 billion and $100 billion, making it the largest tech IPO since Chinese e-commerce business Alibaba in 2014.
Uber’s pending IPO comes as many experts are questioning the profitability of the ride-share model.
Lyft’s stock debuted last month at $72 per share before immediately dropping below that target. It is currently trading at $67.56. In an April 9 interview on CNBC’s Fast Money, New York University professor Aswath Damodaran said Lyft should be trading closer to $59 per share with a valuation of $15 billion. That would wipe nearly $3 billion off its $17.7 billion valuation as of today and cut its share price by about $3, as CNBC reported.
“The driver is a free agent. The customer is a free agent. There is absolutely no stickiness in the business, and they know it. That’s the basic problem I have with the ride-sharing business [model] – not just Lyft,” Damodaran said.
Uber CEO Dara Khosrowshahi is expected to address profitability concerns during his company’s IPO roadshow, to take place in late April. That would put the company on track to price the IPO and begin trading on the New York Stock Exchange in early May, Reuters reported.
This story will be updated.
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