Illustration: Sarah Grillo/Axios
Wall Street banks last fall told Uber that it could fetch a $120 billion valuation in its IPO. What we didn't realize at the time was just how important that specific figure was to Uber CEO Dara Khosrowshahi.
The bottom line: Khosrowshahi stands to make a boatload of money if Uber maintains an average fully-diluted valuation of at least $120 billion during a period of 90 consecutive trading days, according to a footnote in the company's IPO registration document.
By the numbers: Specifically, he'd be entitled to stock options to buy 1.75 million shares. The fair market value when those shares began vesting last May was $59 million, but would be substantially higher at a $120 billion valuation (yes, even fully-diluted).
- For context, 1.75 million is more than all of the other stock options Khosrowshahi could earn. He also currently holds just under 200,000 actual shares, and last year received a $1 million salary and $2 million cash bonus.
- For further context, he left over $180 million of options on the table when he left Expedia to take the Uber job.
- This potential options grant is part of his original employment agreement, not something specifically tied to the IPO.
Shot: Just to give Khosrowshahi some heartburn, Lyft shares closed yesterday at $56.11. That's 22% below the IPO price and just 18.5% above the final private share price.
Chaser: Just to give Khosrowshahi some antacid, both Zoom and Turning Point Therapeutics this morning increased their IPO size. Neither is a transportation company, but the moves suggest that Lyft hasn't softened the broader IPO market.
What to watch: It will be interesting to see if we get an amended filing from Pinterest over the next 24 hours.
Go deeper: Why Uber's post-IPO value will be at risk