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Why Uber should IPO in China

Pras Subramanian

I’m going to put it right out there. I love Uber. Living in New York City, it might be the best service out there for weary New Yorkers tired of riding grimy subway cars, or taxis that feel like the Cyclone at Coney Island.

And it’s not just New Yorkers like me singing the company’s praises. Uber is huge in Los Angeles, Chicago, Miami, and most importantly, numerous cities abroad. It’s no wonder Uber’s valuation has been soaring.

While eye-popping numbers like $50 billion are bandied about, Wall Street banks (and IPO-crazed investors) are eyeing when Uber will unleash that value and go public. It’s just a matter of time.

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And lo and behold, word comes that the company’s planning its IPO. Yes, Uber is considering going public... in China. Uber executive Liu Zen, who heads Uber’s strategy in China, was quoted in the Beijing News claiming the Uber China unit may consider an IPO in that country. This as reports have surfaced that the a company is preparing to raise a billion dollars for its Chinese arm.

While it might seem crazy for a company to file an IPO in Shanghai, where stocks have violently seesawed this year as the country’s central planners intervene in the market, Jeremy Hill of Old Blackheath Companies believes a mini-IPO in China does make some sense.

“In this instance, it might give them a little bit of liquidity without going public in the U.S.,” he says in the attached video. “They’re approaching a $50 billion static valuation, it’s not like they can’t go public (in China) - they can, and they will.”

Hill believes going public in China gives the company some additional leverage, too, with their private investors. “This perhaps is a way for them to stay private at the top level of the company, but public and give a little bit of liquidity to [their] investors.” In Hill’s mind it’s only a matter of time before Uber goes public here too, but with CEO Travis Kalanick’s beliefs about the advantages of staying private, it might take some time.

As for Uber's many customers (including myself), as long as the service stays great, and relatively affordable, they’re not going to give a hoot if the company IPO’s in the U.S., China, or even Kazakhstan.

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