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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Uber: the biggest IPO of 2019?

Release date is yet to be determined, but the filtering of information through the stock market is causing all the excitement and criticism.

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What do the markets think?

Current estimates suggest that Uber Inc. could achieve a valuation in excess of $US100b. If this figure materializes, it would make the IPO the largest of 2019 – and one of the largest of all time. Such an outcome, according to documents provided by Uber to holders of its convertible notes, might translate into a share price between $US48 and $US55 per share.

Such extraordinary estimates, of course, have not come without critics in the market. Uber, after all, has not achieved a full year net-profit since its conception 10 years ago. Furthermore, some suggest Uber Inc may be inhibited by the recent launch of key-competitor Lyft, Inc., with that firm’s share price tumbling over 15 per cent in the weeks following its own IPO.

What’s the company saying?

Uber Inc.’s senior management shrugged of the Lyft Inc. comparisons, suggesting there is enough room in the market for both companies; and that Uber Inc. is more than just a ride-sharing company: it’s also a potential transport and logistics firm, too. Hence, despite the perceived competition in ride-sharing space, and the company’s failure to ever turn a real profit, Uber Inc. will be targeting a valuation between $US90b-$US100b, based on the firm’s self-perceived growth potential.

How can IG clients trade the IPO?

Ahead of the IPO, IG is launching a grey market in Uber Inc. shares to allow traders to speculate on what the company’s market capitalisation will be at the end of its first trading day. For example: if a trader thinks that the estimated share price of Uber is under-or-over-valued, the grey market enables them to take advantage of this difference before the company’s physical shares are released on the stock exchange and becomes a normally traded share.

Learn how to trade Uber's IPO with IG

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Looking for an IPO opportunity?

Uber is expected to launch its IPO in 2019. Find out what the valuation could be when it arrives on the stock market, as well as how you could trade it.

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