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Uber Sells Stake to SoftBank, Valuing Ride-Hailing Giant at $48 Billion
January 22 2018, 02:01 | Alonzo Simpson
Uber's valuation could be significantly slashed after SoftBank deal: Report
The deal is good news for SoftBank, which has been trying to get a stake in Uber for years, and good news for the ride-sharing company, which should see an immediate influx of much-needed cash. Employees and investors allegedly tendered shares representing 20% of the company. It marks the first significant piece of business for new CEO Dara Khosrowshahi, who is now preparing the embattled ride-hailing company to go public by 2019.
A former employee's charges of endemic sexual harassment led to an internal review, London has said it is stripping Uber of its license and recently Uber announced it had covered up a major hack.
The investor group is also buying about $1.25bn worth of new shares at a price that values the firm at nearly $70bn, a significantly higher price that is similar to what Uber shares fetched in its last fundraising round. The WSJ's reporting suggests that SoftBank's successful offer valued Uber at $48 billion. The company still faces numerous legal challenges, including a massive trade secrets lawsuit with Alphabet's self-driving vehicle unit Waymo and multiple government investigations into potentially illegal business practices. The tender offer period concluded on Thursday.
More than anything, however, SoftBank's presence on the board of Uber should help bring an end to the in-fighting that has plagued the company all year. That's a roughly 30 percent discount over Uber's most recent valuation of close to $70 billion. The size of the board will expand from 11 to 17, which dilutes the power Kalanick wields.
Rajeev Misra, chief executive of SoftBank's Vision Fund, a tech investment vehicle, will be nominated to the Uber board, the Journal reported.