Kalanick Sells A Third Of His Uber Stake For $1.4 Billion

One week after Uber lost the title of the world's most valuable startup to its Chinese competitor Didi Chuxing, when company shareholders sold roughly $10 billion in stock to Softbank at a 30% discount to its most recent valuation of $68 billion, accepting a value of $48 billion as fair, overnight the WSJ reported that Uber's former CEO and co-founder Travis Kalanick, who was ousted as chief executive in June, was selling nearly a third of his 10% stake for about $1.4 billion.

Kalanick’s sale is part of the deal that was struck by a consortium of investors led by SoftBank which is taking a 17.5% stake in Uber, mostly by purchasing shares from early investors and employees. SoftBank last week secured agreements from shareholders who were willing to sell, and the deal will close early this year, Uber said.

According to the WSJ, Kalanick had originally offered to sell as much as half of his total shares, but because there was a limit on how much SoftBank would buy, he agreed sell just 29%. Other investors also did not get to unload as many shares as they had hoped because of such widespread interest to sell. And, as Reuters summarizes:

The former CEO owns 10 percent of the company, which means his sale will unload 2.9 percent of Uber shares and earn him about $1.4 billion, the source added.

The bad news for Uber investors is that this sale by its former CEO at a sub-$50BN valuation limits any potential upside in the company for a long time, if not ever. The good news for Kalanick, is that it makes the Uber co-founder a billionaire for the first time, not just on paper.

Kalanick had never before sold shares of the company he ran for almost a decade.

The SoftBank deal offers investors and employees what could be their last chance to sell shares in a company-approved transaction before Uber’s long awaited initial public offering, planned for 2019.

Finally, the sale is also a victory for new CEO Dara Khosrowshahi, who helped broker the deal in hopes of cashing out some of the company's legacy investors and who will benefit from a deep-pocketed investor like SoftBank.

Comments

Last of the Mi… Fri, 01/05/2018 - 06:19 Permalink

Dump more quickly if you have any financial sense at all, my friend. It's 2018 and the self-driving UBER cars we were promised ain't here. Later, you'll find the same with the Tesla 80,000 lb big rig, hyper tunnels, colonizing Mars and a whole host of pajama boy techie Ambien and alcohol carnival like creations spun from the drug induced minds of the carnival elite. 

a Smudge by an… fx Fri, 01/05/2018 - 06:49 Permalink

OT: Some people have been clamoring to BRING BACK THE CHAT!

Don't do it. The chat was a devious and malevolent cesspool which almost reflected the nascent racist ugliness for which zh has become known in the post-Tyler era and the very fact that zh still has an antidiscrimination statement in the footer is a mockery of our values as libertarians.

Frankly the only reason we had a chat was so that CHUMBAWAMBA could express his essential superiority and guess what?

Chumba is a Syrian. And he was better than any single one of you on a Tuesday.

So don't bring back the chat. It's simultaneously better than you think you can be and even worse than who you are.

Period. You're welcome.

In reply to by fx

QuarkJaguar Fri, 01/05/2018 - 07:26 Permalink

Disruptive? Yes. My uber driver in singapore used to be a taxi driver for 20 years. The day he handed his taxi back last December, 150 taxis were handed back that day. Thousands of taxis sit in empty lots. Profitable? No.

Sonny Brakes Fri, 01/05/2018 - 07:46 Permalink

Why would anyone ever want to leave the house? Uber just adds yet another tracking device that monitors your whereabouts. I'm ready to pump the brakes on this holographic lifestyle. 

rwe2late Fri, 01/05/2018 - 11:35 Permalink

 damn!

10% cut on 1/3 of his stake.

only got 1.4$ billion

poor guy will be living in a cardboard box and dumpster diving for food.

so very sad

vofreason Fri, 01/05/2018 - 12:00 Permalink

It may be overvalued like everything else but Uber is a terrific service and idea,..... you people that don't admit that must be country rednecks and have never used it.  It may not be Uber necessarily but the idea is changing transportation forever.  They are the current leader and in some form will certainly be a very profitable business someday.  Yeah stock may get crushed due to overvaluation like anything but it or a similar company will make it a cash cow for a long time in the future and if you think it won't then you can't see past the junk yard in front of your house full of cheesy lawn decorations you call a front lawn.