X

Goldman Sachs Dumps Uber Stake After Disappointing IPO

Uber’s IPO turned out to be the biggest dud of 2019, with investors clearly giving thumbs down to one of the most anticipated IPOs last year. The market’s lukewarm response was result of Uber’s highly stressed balance sheet and inability to convince investors about its long term revenue model. Therefore it was highly expected that some of Uber’s existing investors will probably dump their stakes as soon as the six month lockdown period ends.

Investment giant Goldman Sachs turned to be the first major existing investor to heed to the pressure and dump its entire stake in the ride hailing major. Goldman Sachs’ CFO Stephen Scherr made an announcement with regard to this during earnings call on Wednesday. The New York based investment giant reportedly owned 10 million shares of ride-hailing major at time of the sale.

It is not clear exactly how much Goldman earned through share sale proceedings, which is believed to have been completed in the last month (December) of 2019. But it is unlikely that the investment giant may have made much profit given that Uber’s stocks have been on a downward spiral ever since its listing.

It is also not clear whether other existing investors including SoftBank will now chose for unceremonious exit in the wake of uncertainty over Uber’s revenue model and its long term sustainability. Back home in India, the San Francisco based ride-hailing major is making aggressive efforts to pare down losses in the Indian operation. It is trying hard to sell its Indian food delivery business to incumbent market leaders – either Zomato or Swiggy. However, its efforts so far haven’t yielded much positive results.

Uber’s continuing and enormous struggle towards profitability seems to be a clear case of startup bubble getting busted. A prediction that many industry experts have been making off late.

 

Categories: News
Girish Shetti: A writer with a passion for tech, marketing, and sports, he delivers captivating articles for the tech enthusiasts. Girish’s expertise in technology and startup analysis brings insightful content and the latest trends to our readers. He loves being the ‘first’ to know(and write) all that’s happening in the world of Tech and startups.