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

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.