Editor's note: This post has been updated to reflect Uber's $45 price per share, which it set on May 9.
If 2019's spate of tech unicorn IPOs were a music festival, Uber would be the headlining act. And it has finally taken center stage.
The 10-year-old ride-hailing company priced its shares at $45 a piece, lower than expected, valuing the company at about $82 billion for its debut May 10 on the New York Stock Exchange. That's roughly $25 billion higher than the combined market caps of Beyond Meat, Lyft, Pinterest, and Zoom, some of the buzziest companies to go public so far this year. Just as staggering are Uber's losses at $1.8 billion for 2018. CEO Dara Khosrowshahi reportedly has been pitching investors on the idea that the company's losses--and alarmingly high burn rate--are an unavoidable step to transform Uber into the "Amazon of transportation."
Uber is the latest and biggest example among a crop of startups that have managed to rack up billions in funding and command sky-high valuations without first proving they can turn a profit. As such, how investors react in the weeks and months ahead could have reverberations for plenty of tech companies with grand ambitions.
It's the perfect moment to look back at some of the most important American tech IPOs in history. Will Uber really be another Amazon? How does its IPO compare with Facebook's? Scroll down to see in four charts how some of the most highly anticipated tech IPOs in the past 40 years stack up. Mouse over the charts for more details.
One important differentiating factor to consider: Amazon had been around for only three years before it hit the public market. Uber is a decade old, and it is still losing billions per year.
Ten years on the road have helped give Uber its undeniable ubiquity: It doesn't matter if you're hailing a car from that company or from Lyft, "Uber-ing" to your destination has become a colloquial phrase. Along with its dominant market share, Uber's brand recognition has allowed it to command a high valuation from investors. Notably, Uber priced its shares on the low end of the spectrum at $45--much lower than rival Lyft, which went public at a $72 share price but saw it sink to below $60 in the following weeks. (Lyft shares were trading around $52 as of presstime.)
Just like Facebook did when it went public in 2012, Uber sold hundreds of millions of shares to reach its funding goal--180 million on its IPO day to be exact. The banks underwriting Uber's IPO, which include Morgan Stanley and Goldman Sachs, have the option to buy an additional 27 million shares from existing shareholders at its IPO price. If they exercise this option in the next 30 days, Uber's total raise would grow to $9.3 billion. While Uber is expected to be the biggest IPO of 2019, it still lags behind Facebook.
Perhaps the most telling data point revealing how tech startups have evolved over the past 40 years is the sheer number of safeguards now listed on a company's prospectus. When Apple went public in 1980, its S-1 form contained zero mention of any risks associated with its offering. It was also 47 pages long--which is about the same length as Uber's risk section alone.
"The increase in length and added risk factors is not so much because of SEC regulation changes, but instead it is companies trying to protect themselves against plaintiff lawyers by showing 'we warned you!' in writing," says Jay Ritter, IPO scholar and professor at the University of Florida. According to Ritter, while many of the risk factors mentioned these days are warning investors about boilerplate issues, like rising interest rates, they often serve another purpose.
"A disadvantage of the added length is that it makes it more difficult for an investor to wade through everything to figure out what is important," he adds.