Sources describe Uber's IPO process and the setbacks that led Uber's $120B pre-IPO valuation floated by bankers to fall to its current market cap of $69B
Last September, Uber's top executives were pitched by some of Wall Street's biggest banks, Morgan Stanley and Goldman Sachs.
Context & Ripple Effects
The gap between Uber's private and public valuations has been widening for months: in October 2018 bankers floated a $120B IPO valuation, by April the company had set a price range of $44–$50 targeting roughly $84B at the top, and it actually raised $8.1B at about $82.4B before closing down 7.6% on day one. The NYT's account traces how that slide happened inside the process itself — Morgan Stanley and Goldman Sachs pitching executives last September, then successive markdowns from $120B to a $90B–$100B sale target to the final pricing.
What changed today is the endpoint: a market cap of $69B, less than 60% of what Wall Street's biggest banks pitched Uber's own leadership eight months earlier. That makes this less an IPO story than a case study in how bank-sourced private valuations get repriced the moment public buyers set the clearing price.
First-order effects
- Uber's existing shareholders — employees and early investors holding stock marked near $120B last fall — are sitting on paper losses of more than $50B per share-count implied by that pitch, with lockup expiries still ahead.
- Morgan Stanley and Goldman Sachs, which won the mandate on the strength of those September valuations, face reputational pressure on future mandates if issuers read the $120B pitch as a sales tactic rather than a defensible number.
Second-order effects
- Late-stage private companies weighing IPOs will discount banker valuation pitches sharply, forcing underwriters to anchor roadshows to comparable public multiples rather than aspirational marks to win deals.
- Secondary-market buyers of pre-IPO stock — the funds that priced Uber near its private peak — face mark-downs that tighten their appetite for other unicorns' shares, pressuring private valuations across the ride-hailing and loss-growth cohort.
Third-order effects
- If the pattern holds, the private-to-public valuation gap becomes a standard diligence item for IPO investors, shifting negotiating power from issuers and their banks to the buy side and pushing companies to either cut burn before listing or stay private longer.
- Bank economics come under scrutiny: if headline valuations are seen as deal-winning marketing, issuers may demand fee structures tied to post-IPO performance rather than upfront league-table credit.
The trend: The 2019 mega-IPO class is repricing the entire late-stage venture cycle, exposing the spread between bank-pitched private valuations and what public markets will pay.