Uber Out $20 Billion With SoftBank Reportedly Seeking 30% Discount on New Stake - TheStreet

Uber Technologies's string of leadership and business failures may have cost investors more than $20 billion, according to reports that suggest Japan's SoftBank (SFTBY)  is seeking a 30% discount on its massive investment in the ride sharing group

Multiple reports, first revealed by Bloomberg, indicate that SoftBank, along with partners Dragoneer Investment Group and General Atlantic, is offering $33 a share, plus 1 billion in direct cash, for a 14% stake in Uber that would make it one of the San Francisco-based group's biggest stakeholders. The offer, however, is essentially a 30% discount to the assumed valuation of Uber, based on its last round of funding, and would peg its worth now at $48 billion.

The reports follow a major security breach at Uber that led to the theft of 7 million customers, emails and telephone numbers of around 50 million and licence plate information on some 600,000 drivers. Uber said late last week that it had informed SoftBank of the October 2016 breach, which resulted in a $100,000 payment to hackers and the alleged destruction of 57 million users' data, before it told the public.

That revelation has authorities around the world looking in to what the company knew and when it -- and its founder and former CEO Travis Kalanick -- knew it.

It's also created a whole series of headaches for new CEO Dara Khosrowshahi, who said earlier this month that the group is looking to go public by 2019, telling an investment conference in New York last week that while Uber has "all the disadvantages of being a public company with the spotlight being on us" it has "none of the advantages" because of its private status.

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Former CEO Travis Kalanick "and the whole board now agree we should just go public. The numbers support it," Khosrowshahi said, adding that Uber is rebuilding the governance of the company as it preps for a stock market listing.

Aside from the security breach, however, Uber is still picking up the pieces related to the fallout from a blogpost earlier this year from former engineer Susan Fowler that lifted the lid on a culture of harassment and intimidation at the world's most-valuable start-up.

Uber is also struggling to hold onto early-mover advantages in key markets such as London, the biggest in Europe, where authorities are looking at revoking its operating licence over concerns that it's not properly screening drivers and following established transport rules.

Uber lost a crucial battle in its attempt to hold onto its London licence earlier this month after a U.K. tribunal denied its appeal in case involving workers' rights.

The ride-sharing company was told last year that it had to treat its drivers as paid employees who would be entitled to minimum wage and holiday pay benefits as opposed to individually contracted partners. The company appealed the ruling to the central London Employment Appeal Tribunal but was denied its plea.

The decision casts a major doubt over the fate of its London licence, which was essentially revoked by Transport for London authorities in September amid concerns over the vetting of drivers and the alleged use of software that would evade government monitoring of vehicles.

Uber London filed a formal appeal against the city's decision in Westminster Magistrates' Court in central London and is expected to be heard on December 11, although the ultimate fate of Uber's operating license in the British capital may not be known for several months.

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