Reports have emerged that former Uber CEO Travis Kalanick will be selling shares in the company he co-founded, in a deal that is reportedly a little over $1 billion.
This will constitute to be around 29% of company shares in total.
Uber Technologies Inc. is a global transportation technology company headquartered in San Francisco, California, United States, operating in 633 cities worldwide. It develops, markets and operates the Uber car transportation and food delivery mobile apps. Uber drivers use their own cars although drivers can rent a car to drive with Uber. The company was started in 2009.
Travis Kalanick was one of the co-founders and its former CEO. Considered to be one of the most successful companies in the world, Kalanick was forced to step down in June 2017 after an internal revolt by five of Uber’s largest investors. He remains on the company’s board. The board revolt occurred due to a series of controversies that have plagued the company in the recent year and a half. This includes claims by former employees about the working conditions within the company. A blog by a former employee Susan Fowler about the sexual harassment rampant at Uber went viral. This led to Uber firing more than 20 members of its staff and taking action against others following a review of more than 200 HR complaints that included harassment and bullying. The company has been repeatedly accused of harboring a “frat boy” culture within its walls.
As of 2017, Kalanick’s net worth was reportedly $5.7 billion. Uber has been a pioneer in the sharing economy, so much so that the changes in industries as a result of it have been referred to as Uberisation. After Kalanick was forced to resign from his position, the company then made an offer to Dara Khosrowshahi to become the company’s next Chief Executive Officer. Prior to that, Khosrowshahi was the CEO of Expedia, a travel company.
The spate of controversies continued in 2017. According to confirmed media reports, ride-sharing technology company Uber, concealed a hack that affected 57 million customers and drivers. The hack took place in 2016 and then-CEO Travis Kalanick reportedly was privy to the fact. The paid hackers $100,000 to keep the massive breach a secret. Additionally, it was found that the company had paid a bounty to the hackers to keep the hack a secret.
In addition, reports noted that SoftBank is hoping to buy Uber’s existing shareholders at a valuation of $48 billion. This is a 30 per cent cut from the ride-hailing group’s previous fundraising. The company has been valued at $69 billion valuation.
It has now been revealed that former CEO Kalanick will for the first time be selling shares in the company he co-founded, in a deal that is reportedly a little over $1 billion. This sale is part of SoftBank’s plans to acquire Uber. SoftBank has not made any public comment regarding the sales presently. Terms of the deal prevents sellers from parting with more than 58 percent of shares initially offered, requiring Kalanick to sell a smaller portion of his stake. Spokesmen for Uber and Kalanick declined to comment.
It has been speculated that the deal with SoftBank is finalized in February 2018. Experts expect widespread changes to be introduced in the organization once the sale is finalized.
Our assessment is that when the deal with finalized, SoftBank is likely to move swiftly to reduce Kalanick’s influence within the company he co-founded. This is one of the steepest falls of a tycoon in recent history as two years ago he was being hailed as a visionary and companies across the world raced to ape Uber’s success. SoftBank’s acquisition is also likely to usher in further changes in the working environment within the company which has been criticized for its “frat boy” culture.