Some Uber's earliest backers are currently in discussion to sell some of their stock in the company to a slew of interested Investors including Softbank Group, according to a report by Bloomberg. The company boasts of hundreds of investors but following a year of scandals and major changes in the company, it seems that the earliest investors believe that it is a good time to cash in on their investments.
A new direction
Uber's troubles over the past few months have made investors jittery about the future of the company and the ouster of charismatic CEO Travis Kalanick must have come as a wake-up call as well.
Bloomberg spoke to a couple of people who are close to the developments and according to them, some of the earliest investors in the world's most valuable start up are keen to cash in on their investments. The scandals that have plagued the company have been cited as a factor in their decision to liquidate a part or the entirety of their holdings.
One of the earliest investors, Benchmark is the ringleader in the stake sale talks and was also instrumental in leading the backlash against Travis Kalanick, that led to his ouster. At this point in time, Uber has a total of around 500 investors and it is understood that Kalanick, who is still a board member at the company had no idea about the developments.
Three important shareholders, however, told Bloomberg that they are unaware of Benchmark's plans to sell their stock in Uber.
Will it happen?
Uber, which is currently valued at $69 billion, is unlikely to find itself in any trouble when it comes to new investment but the notion that Japan's Softbank is going to buy out the stakes of these investors seems far fetched at best.
Although it is true that Softbank has the requisite cash and boasts of a tech fund worth $93 billion, it will be counterproductive on the part of the bank to invest in Uber. In fact, the Bloomberg report states that they have no plans of investing in Uber and primarily due to the fact that Softbank has invested in some of Uber's competitors in different parts of the world.
The panic among investors is understandable considering the turbulent period that the company has gone through over the past few months. In addition to that, Uber is yet to name a new CEO and are still grappling with operational issues. Last week, Uber announced its exit from Russia as well and in such a climate, it is hardly surprising that some of the earliest investors feel that it is time to sell off their stakes.
