Unicorn-holed: Softbank Coalition To Buy Uber Shares At A 30% Discount

Tyler Durden's picture

And the hits keep coming for the unicornest unicorn in all of unicorn-land...

Back in the summer, we suggested - for numerous reasons - that Uber's next round of financing may come at a significant discount to its current $69 billion valuation.

Overnight, headlines hit that SoftBank was said to have learned of last year's hidden-to-the-public security breach about a month ago, and may have changed SoftBank’s evaluation of Uber’s shares, WSJ reports, citing people familiar with the matter. As a reminder, in addition to failing to notify users and the public about the information that was exposed, the company paid the hackers $100,000 to delete the data and subsequently had them sign nondisclosure agreements.

Furthermore, ReCode reports today that the city of Chicago is suing Uber for failing to disclose the 2016 breach of 57 million users’ data.

SoftBank was expected to proceed with an offer to buy billions of dollars worth of shares from Uber stakeholders as soon as this week, with a SoftBank-led investors group planning to start to buy at least 14% of Uber from existing shareholders through tender offer "at a steep discount."

Well tonight we find out just how steep that discount is...

Bloomberg reports that SoftBank and a coalition of investors will offer to buy shares in Uber at a price that would value the ride-hailing company at 30 percent less than its most recent $69 billion valuation, according to two people familiar with the matter.

 

The deal isn’t done, however. Shareholders will need to sell at the $48 billion price.

 

While it’s 30 percent less than the current valuation, the offer would represent a significant windfall for many early investors.

 

If shareholders don’t agree to sell in sufficient numbers, SoftBank could raise the price or walk away.

We suspect shareholders will be more than willing to dump their shares to monetize some of their rapidly declining investment or face being truly unicorn-holed.

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peddling-fiction's picture

Aw shucks...

And the pruning begins.

chumbawamba's picture

Unicorns have ball joints instead of spines?

Weird.

I am Chumbawamba.

Shemp 4 Victory's picture

 

or face being truly unicorn-holed.

Yow, that's gotta hurt!

zorba THE GREEK's picture

It would be wise to sell now before competition drives the price per share much lower. An Alabama group is getting ready to launch a new IPO called GOOBER to compete at much lower rates.

FreeNewEnergy's picture

Still paying too much. Isn't Uber Swahili for "dead meat?"

BidnessMan's picture

Surprised the discount is only 30%

JRobby's picture

Fred!

So am I. 60% on a good day.

Freddie's picture

Me too.  I use Lyft once and a while and it has always been good.  The drivers have been nice with clean and new vehicles.  

Softbank guy is pretty savvy.  I would think he would have asked for a bigger discount.  The Japanese do a lot of stupid shit but the Softbank guy seems smarter than most. 

buzzsaw99's picture

softbank doesn't mind buying a fraud they just want to joo them on the price.

Joebloinvestor's picture

I find myself hoping they both take a big hit.

Cluster_Frak's picture

average down, BULLISH!!!

yourlifeisamyth's picture

I've been kidnapped by Kmart...

Publicus's picture

Uber will go bankrupt and be sold for pennies on the dollar. Softbank is getting scammed ar 30% off.

max_is_leering's picture

is Wells Fargo running the equity share sale of UBER to Softbank?

yarpos's picture

Hackers getting paid to sign non disclosure,  comedy gold

rlouis's picture

Makes me wonder if they used their real names.

MayIMommaDogFace2theBananaPatch's picture

NDA...

Signed,

Sum Ting Wong (with your network security)

my new username's picture

Uber probably made the hackers license their hacking tools to Uber, with a 50:50 profit share for Uber from all future Ransomware attacks. Paid in Bitcoin, of course.

hooligan2009's picture

scam

1. keep the company private, so no books are open to the public or to regulators.

2. make up a fictitious set of books valuing the "company" using s/sheets with exponential growth rates in markets that are shutting uber out (london and china plus others).

3. say "hey look, i am worth 69 billion" when the number is closer to the value of a private SQL database with mobile access - that is - 5,000 bucks. mobile phone companies could run the uber software with a ten dollar app, if they could be bothered to help their customers by vetting employees in a cab company.

4. pretend to hesitate over a 30% discount to 48 billion for this ten dollar app company.

5. bite softbanks arm off, take the money and try not to gloat as softbank eats a 48 billion LOSS.

cab companies carry ten times uber's traffic, vet employees, pay insurance and are everywhere that uber is - just imagine if cab companies joined up on a ride sharing google map basis.

it's not hard to replicate, there are no barriers to entry, just ambition and willingness.

ds's picture

When deformed markets price X that is at variance with the Analysts (Losers) models, they are Unicorns ? When biz strategies that just go for market shares with new tools (algos, etc) and not the visible brick and mortar assets they are heretics to yesterday loser Analysts. Blood may flow from the equity market when the props from CB monies are removed but you bet that a high share of the blood from these Unicorns as defined by the Losers ?

You either leave the deformed markets or trade the blips. Don't join the muppets gorging 'racing tips'. Exceptional money managers in proportion to wannabess are also 10/90. The exceptional money managers know how to cull the losers/analysts and the 1% wealth protect their wealth (now) through them. 

 

 

ihatebarkingdogs's picture

Uber is a Zero.  There is no value, no infrastructure or capex.  Softbank is overpaying by 70%.

oncemore's picture

They will hold then 70%.

70% of junk, delivering no profit since 4 years. Excellent company, excellent economy, based on racial links, being a Jew means you can drive the company into the ground, without profits and still be  in business.