One of Uber’s key investors, Goldman Sachs has reportedly sold off its holdings in the company in the recent few months of 2019.
The investment bank was reportedly disappointed by Uber’s performance in the stock marker and therefore it decided to cut its losses and sell off the holdings.
On January 15, CFO Stephan Scherr while speaking on its earnings call stated that the company has shut its position in Uber in Q4 2019.
He further added about Goldman taking up the “harvesting opportunities” in the 3rd quarter of 2019 and got some of its holdings sold off. Along with this he also noted that the bank will keep decreasing the exposure in its investment, which amounts $2.4 Bn by the end 2019.
This action was taken even after the post-initial public offering (IPO) lock in period of about 6 months that Uber had set under which no investors were enabled to sell their stake in the company.
The lock-in period got over in November 2019 and as Uber’s share took a hit in the third quarter of the FY, Goldman is known to have sold its 10 Mn shares in Uber in mere two months. Also, the investment bank reportedly lost Morgan Stanley as the lead banker in Uber’s IPO.
Uber is known to have had losses of around $1.16 Bn in the third quarter of 2019 that accounted for 68 cents a share. Nevertheless, its revenue also improved by 30% to $3.81 Bn. Uber shares post reporting its financials, again dropped by 5%. Uber in the second quarter had reported a loss of $5.2 Bn on a revenue of $3.16 Bn.
About 15% of money have been lost by Uber Investors suggests a report by Axios and it has bee since then that the company has gone public.
However, there were anticipations of Uber going public in 2019 but on the first day itself the shares popped up at $41.57 apiece, about 7.6% lesser than its $45.00 per share IPO price. The company reportedly managed to raise $8.1 Bn on day one through its share offering and at present it is trading at $35.01.
Uber back in July 2019 was also forced to downsize its marketing areas across 75 branches. It had to cut down 400 employees from its staff of 1200. This was a few days before it announced its Q2 2019 quarterly report. Besides that, Rebecca Messina, CMO and Barney Harford COO also stepped down from their position in Uber in June 2019.
One of the many causes behind the layouts is Uber’s first quarters’ losses. The company had to lose $1Bn in the first quarter of 2019 and the layoffs were considered a part of Uber’s efforts to reduce spending on human resources as well streamline its operations.