If Uber were ever in the market for a new corporate motto, the rideshare giant could adopt a line made famous by the late rapper Notorious B.I.G.: “Mo’ money, mo’ problems.”
The privately held Silicon Valley institution was valued at an astronomical $70 billion by many major markets just last year, but has been hemorrhaging money in 2017, and last quarter was no exception.
Uber lost $1.5 billion in the third quarter alone, according to projections from several financial institutions. And the substantial hit isn’t the only bad monetary news for the company.
Japanese powerhouse SoftBank is attempting to purchase a bloc of stock in Uber—but wants a discount for buying in bulk. The Asian company is reportedly angling to spend 30% less than what the stock options are worth—a move that, if approved, would bring Uber’s projected valuation down to $48 billion.
Inking the deal had been a priority of new Uber CEO Dara Khosrowshahi and was widely considered a way for the struggling company to buoy itself ahead of a long-expected initial public offering. But SoftBank seemingly got the upper hand in negotiations when word spread that two key early backers of Uber, Benchmark Capital and Menlo Ventures, were looking to sell their shares.
Such a reversal of fortune has been a theme of the year for Uber, which has weathered nearly countless scandals in 2017 and is still embroiled in a nasty legal dispute with corporate rival Waymo, which started this spring.
Before the quarterly announcement, however, things started looking up for the beleaguered company, with a rise in both gross bookings—the biggest measure of its service’s success—and net revenue, at 11% and 21% respectively, according to Bloomberg. Still, the amount of money Uber lost in Q3 spiked by 38% compared to Q2, which ultimately sealed the company’s fate in its latest earnings report.
But the whispers of the finance world may offer some glimmers of hope for the rideshare giant. A compromise allegedly in the works would leave SoftBank with the shares it wants, and still preserve a projected valuation of $54 billion for Uber, according to the Bloomberg report.
Whether that will be enough to see Uber safely through to its anticipated IPO launch in 2019 is a worry for another time.