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The case for Uber at $95 billion

Photo: Jaap Arriens / Getty Images

What is Uber really worth? That's a big question right now, as SoftBank is prepping a private tender that could value the company as low as $50 billion or as high as the $70 billion that it got in its last funding round. But one shareholder, who asked to remain anonymous, argues to Axios that a comparable analysis actually should value Uber at upwards of $95 billion.

Here's the math:

  • Comp #1: Lyft's gross revenue for Q2 2017 reportedly came in at around $1 billion, and it recently raised new funding from Google at a $10 billion pre-money valuation. That works out to a 2.5x multiple on annualized gross revenue.
  • Comp #2: Didi Chuxing's gross revenue for Q2 2017 came in at around $5.75 billion, per a source, and was valued in May by SoftBank at $45 billion pre-money. That works out to a 1.95x multiple on annualized gross revenue.
  • Applied: Uber's gross revenue for Q2 2017 reportedly was $8.7 billion, or $34.8 billion annualized. Were it to receive the multiple applied to Lyft, the valuation would be $87 billion. If it received the multiple applied to Didi, the valuation would be nearly $68 billion.
  • Addition: Uber owns a 17% stake in Didi, which should be worth $8.5 billion (based on the May post-money).
  • New valuation range: $76.5 billion to $95.5 billion, depending on if you use the Didi or Lyft multiple. One could argue Didi is a better comp because it's a larger company, or one could argue Lyft is better because it's U.S.-based and its valuation is more current.

Transparency: The shareholder is among those expected to receive the tender offer from SoftBank, so has a vested interest in the Japanese firm proposing a high price. But that doesn't change the math.

Additional caveat: None of this takes into account non-financial arguments that SoftBank could make for discounting the tender, such as Uber's recent management tumult, self-inflicted PR wounds, litigation risk and shareholder motivation to enact governance changes that are tied to the deal close. Also, there arguably is some valuation circularity at play here — Didi and Lyft valuations climb because of Uber valuation, and then Uber valuation climbs based on Didi and Lyft valuations.

Steve LeVine 12 hours ago
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Self-driving lab head urges freeze after "nightmare" fatality

Uber self-driving car in Pittsburgh. Photo: Jeff Swensen / Getty

Carmakers and technology companies should freeze their race to field autonomous vehicles because "clearly the technology is not where it needs to be," said Raj Rajkumar, head of Carnegie Mellon University's leading self-driving laboratory.

What he said: Speaking a few hours after a self-driven vehicle ran over and killed a pedestrian in Arizona, Rajkumar said, "This isn't like a bug with your phone. People can get killed. Companies need to take a deep breath. The technology is not there yet. We need to keep people in the loop."

Khorri Atkinson 5 hours ago
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Brother of Florida shooter arrested for trespassing at Stoneman Douglas High

Nikolas Cruz, the suspect in the Florida schol school massacre. Photo: Amy Beth Bennett, Pool / Getty Images

Zachary Cruz, the brother of Nikolas Cruz who confessed to carrying out last month's massacre at Marjory Stoneman Douglas High School, was arrested Monday after authorities say he trespassed on the site where the shooting took place, per the Miami Herald.

Situational awareness: The arrest comes just over a month after his brother shot and killed 14 students and 3 staff members to which prosecutors are seeking the death penalty.