Goldman Sachs dumped its Uber shares after the IPO lockup expired
- Goldman Sachs sold its shares of Uber in the fourth quarter of 2019, Chief Financial Officer Stephen Scherr said on the bank's earnings call Wednesday.
- Goldman owned about 10 million shares of Uber at the time of its initial public offering, with a strong return. In 2019, Uber fell 34% from its IPO price, and Goldman's investment took a hit.
- Like other early investors, Goldman Sachs was prohibited from selling its shares until Uber's post-initial public offering lockup period expired in November.
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Goldman Sachs dumped Uber after its disappointing performance in 2019.
On the bank's earnings call Wednesday, Chief Financial Officer Stephen Scherr told analysts that Goldman exited its position during the fourth quarter.
Goldman Sachs was an early investor in Uber. In 2011, the bank contributed $5 million to the company's Series B funding round, according to Bloomberg.
When Uber listed on the public market in May 2019, Goldman owned about 10 million shares with a profit on its initial investment reaching in the hundreds of millions, Bloomberg reported. The potential windfall was something of a consolation prize as Goldman Sachs lost out to Morgan Stanley as the lead banker on Uber's IPO, which had gained a reputation as being one of the most important public listings in 2019.
But Uber disappointed hugely when it finally hit the public market in May 2019. During the company's first day of trading, shares plunged as much as 8%, wiping out more than $655 million of investor wealth. Uber's woes continued throughout the year as investors balked at the company's large quarterly losses and worried about its ability to turn a profit. At the end of 2019, Uber had shed 34%.
Goldman's investment experienced a loss in the third quarter after seeing headwinds on certain "large equity positions, including Avantor, Tradeweb, WeWork, and Uber," Scherr said.
Like other early investors, Goldman Sachs was prohibited from selling its shares until six months after the offering. When Uber's post-IPO lockup expiration date arrived in November, the stock fell to a new low and brought the company's valuation to its lowest since 2015, when it was a private company.
So far in 2020, Uber has rebounded slightly on renewed optimism following the company's plans to be profitable on an Ebitda basis in 2021. Shares are up 17% year-to-date through Tuesday's close.
