ISSUE – Nov. 17 | SoftBank Thinks Some Uber Shares Are Worth More Than Others

If a group of investors led by SoftBank Group Corp. buys some shares from Uber Technologies Inc. at a $68 billion valuation, and it buys some other shares from existing investors in a tender offer at a $50 billion valuation, then how much is Uber really worth? There is an objectively correct answer to this question, which is, “who cares”: A willing buyer paid one price for some shares and another price for some other shares and all the willing sellers got the amount of money they agreed on, and putting a headline number on the whole thing is just meaningless scorekeeping. But of course people love scorekeeping, particularly in the Enchanted Forest of the Unicorns: Since Uber’s stock doesn’t trade on an exchange, there is no public record of its value changing from day to day, and it can point to its last fundraising round as its still-current “official” valuation, whatever has happened since. But if it does a new round at a lower price, it won’t be able to play that game anymore. And as Uber gets closer to an initial public offering, that game becomes more important: It’s harder to argue for an $80 billion IPO after a $50 billion private down-round. [ Bloomberg ]

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