|Bid||34.09 x 1200|
|Ask||34.20 x 900|
|Day's range||31.00 - 34.29|
|52-week range||25.58 - 47.08|
|Beta (5Y monthly)||N/A|
|PE ratio (TTM)||N/A|
|Earnings date||27 May 2020 - 31 May 2020|
|Forward dividend & yield||N/A (N/A)|
|1y target est||48.66|
(Bloomberg) -- DoorDash Inc., a food delivery company, filed paperwork with the Securities and Exchange Commission to begin the process of a public stock listing.The company said it had filed “confidentially,” meaning its financials won’t be available publicly yet. The number of shares to be offered and the price range have not yet been determined, according to a statement from the company Thursday. The initial public offering is expected to take place after the SEC completes its review process and is subject to “market and other conditions.”The startup had been weighing a direct listing, instead of an IPO, a route that would allow it to go public without the scrutiny that comes with an investor roadshow, but also wouldn’t raise money by issuing new shares. If the company goes through with its plans, it could be one of the first high-profile listings of the year. The announcement comes as the stock market has been roiled by the effects of the spreading coronavirus, though it’s unclear how long the concern will last.The IPO process has been particularly unforgiving recently to deeply unprofitable companies like Lyft Inc. and Uber Technologies Inc. WeWork was forced to abandon its IPO last year and take a bailout from its largest investor, SoftBank Group Corp., when Wall Street rejected the company’s pitch on the roadshow.DoorDash has raised about $2 billion from investors, including SoftBank and venture capital firm Sequoia, most recently at a valuation of almost $13 billion. It uses gig-economy labor and faces similar risks as Lyft and Uber. DoorDash was embroiled in a controversy over drivers’ tips last year, which it addressed partially by increasing pay to workers. However, the issue lingers. The attorney general in Washington sued DoorDash, alleging the company pocketed customers’ tips to reduce labor costs.The company has also been the subject of speculation that it may be bought. Last summer, a DoorDash investor prepared an informal presentation arguing the merits of a sale of the company to Uber, according to a copy of the document obtained by Bloomberg.(Updates with market conditions in third paragraph. A previous version of this story corrected the proper name of the Securities and Exchange Commission)\--With assistance from Candy Cheng.To contact the reporter on this story: Molly Schuetz in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Mark Milian at email@example.com, Molly SchuetzFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
A taxi association will be able to participate in Uber's appeal against the loss of its operating license in the British capital city set to be heard in full from July 6, a British judge decided on Thursday. The Licensed Taxi Drivers' Association will be an interested party in the case, giving it access to documents and meaning it could make submissions, Chief Magistrate of England and Wales Emma Arbuthnot ruled. Transport for London (TfL) in November refused a renewal request from the Silicon Valley-based company to keep operating in one of its most important markets, citing safety failures.
(Bloomberg) -- In the suburbs of Dublin on a windy, overcast day in January, several alumni of Airbus and the U.K.’s Royal Air Force watched as a flying object, shaped a bit like a crouching frog, hovered about 10 meters (33 feet) up in the air.The craft, called MNA-1090, opened its cargo bay door, and lowered a package — about the size of a shoebox — to the ground on a string. The robotics engineers who’d helped design the vehicle opened the carton, looked inside, and smiled: the dozen-or-so pots of Ben & Jerry’s ice cream were still perfectly frozen.In late March, customers on the outskirts of Dublin, far from the dense metropolises that make services like Uber Eats and Deliveroo viable in terms of revenue, will get to try ordering food and drink the same way. Manna.aero built the MNA-1090 drone to be an airborne replacement for the human-and-bicycle formula used the world over by food-delivery apps, and is preparing to run a couple of hundred test flights per day over several weeks to lay the groundwork for a permanent service for small Irish towns. Ben & Jerry’s, U.K. food delivery firm Just Eat Plc, and local Irish restaurant chain Camile Thai are signed up to participate in the pilot that will take place at the University College Dublin campus.“In five years, it’s going to be the most normal thing you can imagine,” Manna Chief Executive Officer Bobby Healy says.If you live in a city, having a hot meal delivered to your doorstep in under an hour has never been easier or cheaper. For about the price of a small coffee, a human being will cycle to a restaurant, collect your freshly baked pizza and bring it to your apartment. Innovations in smartphones, mapping and gig-economy logistics have catalyzed growth of the sector, which research firm Frost & Sullivan estimates will be worth $200 billion by 2025.But the margins are tiny for the companies handling the delivery, and the competition fierce. In October, Grubhub Inc. executives told shareholders they didn’t believe it was even possible to generate significant profit from food delivery. The cost of paying people to drive food around was just too much, they said.Companies are looking for an alternative, and a roster of investors believe Healy might have a model that could work: a drones-as-a-service for restaurants and delivery apps.Here’s how Healy said it will work: Manna will partner with restaurants or food courts that have a high-throughput of orders and a small outdoor space to house a drone-loading team. The Manna craft itself is about the size of a computer printer and will carry meals weighing around 2 kilograms (4.4 pounds) more than 2 kilometers (1.2 miles) in under three minutes, even in wind and rain.Upon arriving at its destination, the drone will hover and wait for the customer to accept delivery using an app, having indicated when ordering exactly where they want their food to land — on the lawn, an outdoor dining table or just in the driveway. The drone will descend and lower the food parcel that, Healy said, will still be “piping hot.”Manna’s vehicle has been designed to travel for 100 million hours without a problem, Healy said in an interview. But, alongside space for three 10-inch pizzas, it also has a backup battery and two parachutes, just in case.The 51-year-old Irish entrepreneur is a mobility veteran: In 2003, he sold off travel software firm Eland Technologies to industry titan Sita.Aero. He then helped build CarTrawler into a transportation platform used by more than 100 international airlines. Healy’s got some well-known names putting $5.2 million behind Manna, including billionaire Peter Thiel’s Founders Fund, Dynamo venture capital, and FFVC, among others.For food platforms, Manna says the service is more than just a gimmick — it will lower delivery costs and allow them to scale to currently under-served suburban areas in a profitable way. Healy said Manna’s drone delivery will cost platforms $3 to $5 per delivery.Fabricio Bloisi, CEO of online delivery platform iFood in Brazil, said the use of drones is a “great breakthrough” for the industry because of their efficiency and ability to travel relatively large distances. He said his company’s working with Sao Paulo-based Speedbird to reduce delivery time by combining the use of drones with bicycles and motorbikes.Uber’s testing a drone for food delivery in the San Diego area, and Alphabet Inc.’s Wing is already delivering coffee, food, medicine and household items directly to homes in Finland, Australia and the U.S. state of Virginia.Amazon.com Inc.’s also developing its Prime Air service, with a view to delivering parcels, not necessarily food, of up to five pounds via drone. The company’s bidding for a stake in the U.K.’s Deliveroo.Healy isn’t worried. He’s pitching Manna as a business-to-business company, where its drones are used by food delivery companies, not end consumers. To the entrepreneur, Wing isn’t his rival. “We’re arming their competitors.”Still, not everyone is so rosy about the drone delivery trend. In a sign of how divided views are on the technology, Dutch food delivery firm Takeaway.com NV — which recently bought Just Eat, one of Manna’s partners for the March pilot — said it thinks drone delivery for food is a “fantasy.”“We just don’t see any way how it can work currently from a technical perspective,” said Joris Wilton, a spokesman for Takeaway. “We will not be investing in developing it in-house.”Miki Kuusi, co-founder and CEO of Helsinki-based food delivery company Wolt, said his company has tested drone deliveries, but, “it’s been more PR than actually about a business case.”That partly has to do with complexities around picking up the food orders, he said. Drone services have to be deeply integrated with the restaurants to ensure that drones are loaded in the right way, something “most restaurants in a hectic environment are not equipped to do.”Then there’s the tricky issue of regulation. Airspace authorities have tightened restrictions on drone usage as their popularity with consumers and troublemakers has grown. People also express discomfort at the idea of machinery whizzing above their homes — both for privacy and safety reasons. Add to that the complexity of hauling hot food in the sky over several kilometres and it’s an uphill battle for any startup to launch a service.Healy recognizes that changing the industry won’t come overnight, given the need to safely test the technology, get approvals from regulators at each new stage as well as from the local communities.Still, he expects to have completed between 20,0000 and 50,000 successful deliveries by year-end.“With this industry it’s ‘crawl, walk, run,’” Healy said, “and we want to crawl for a little while, we want everyone to feel good about it.” To contact the author of this story: Natalia Drozdiak in Brussels at firstname.lastname@example.orgTo contact the editor responsible for this story: Nate Lanxon at email@example.com, Amy ThomsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Uber Technologies Inc. drivers and takeout delivery workers have a new champion in the European Union’s antitrust chief, who wants to help them fight for better pay and conditions.In an interview with Bloomberg, Margrethe Vestager says she’s looking at ways to help “people who work in a weak negotiating position” amid concerns about the plight of workers in the so-called gig economy.A key question is whether the EU can “give sort of European level guidance as to how to allow people to organize” without it being seen “as a cartel,” she said, referring to rules that curb price-fixing between businesses.Europe’s tough cartel rules have squeezed billions of euros in fines out of companies that collude to increase prices. The same rules have also been used to prevent freelance workers from teaming up to collectively lobby for better wages from powerful employers such as internet platforms.Vestager, who has become the bloc’s tech chief in addition to her role as competition watchdog, plans to change that. “We can make sure that people can unionize” because “if you’re just seen as another independent self-employed” person, “it’s very, very difficult to make that happen,” she said. Companies like Uber have transformed how many people travel in cities and order food. Amsterdam-based Takeaway.com is merging with JustEat Plc to create a $10 billion-plus food delivery giant, and Deliveroo has attracted investors such as Amazon.com Inc. to garner a $4 billion valuation.Tension RemainsWhile some companies, such as Takeaway.com, have increased the rights they offer couriers and drivers, tension remains. In 2018 UberEats riders in the U.K. went on strike after a cut in delivery fees, but there is little riders or drivers can do to protest against wages or working conditions. They can’t argue with the software that spits out the orders.And while the couriers might be viewed as freelancers or second-jobbers, increasingly they are low-income earners who rely on one website for pay that varies wildly. Unlike most European workers, they often have limited or no insurance for accidents on the job.“If you look at Deliveroo and UberEats, the app decides what they do when they work and how much they earn. So there is no way of negotiating with those platforms,” said Joris den Ouden, a labor organizer for the Dutch trade union FNV working with food delivery riders. “The amount of money you make depends on how many orders you can do so people are buying electric bikes to be faster and jumping lights.”“Deliveroo has long campaigned for a change to the law to enable self-employed riders to be given more benefits by platforms and will continue to do so,” a spokesman for Deliveroo said in an emailed statement. A spokesman for Uber declined to comment.Minimum WageIn the U.K., the Independent Workers’ Union of Great Britain has challenged companies such as Uber on whether drivers should be entitled to overtime and holidays. Some riders in the Netherlands are working 50-60 hours a week and some are making less than the minimum wage of just under 10 euros ($10.90) an hour, den Ouden said in a phone interview. Deliveroo riders went on strike in the country last August after the company ended some bonuses “but in the end, nothing really changed,” he said.Working out the impact for online platforms such as delivery apps is difficult, given the variable nature of the jobs involved. But in 2016 Takeaway.com launched Scoober -- a restaurant delivery service. By the end of 2019, Scoober used around 9,000 couriers that delivered 5.4% of Takeaway.com’s orders.Even though Scoober is a small cut of Takeaway.com’s total deliveries, it is an expensive business to run, with the company often hiring couriers via employment agencies. Over 2019, Scoober expenses accounted for 73.9 million euros of Takeaway.com’s cost of sales, representing 67% of the total cost of sales in that period, or about 8,000 euros per courier.Worker CartelsCartel rules are part of the problem. In 2004, freelance Irish actors were forced to halt a union pact that set a minimum rate of pay for voiceover work after the country’s antitrust regulator declared their agreement illegal. Dutch musicians fought a similar stance taken by Dutch authorities -- and won in 2014 after an EU court backed their argument that wage pacts should be allowed for workers who are “falsely self-employed” and reliant on one powerful employer.The inability to bargain for wages had a chilling effect, said Ivana Bacik, an Irish senator who eventually pushed Ireland to change the law to allow some types of freelance workers to bargain as a group for better pay. “It became a race to the bottom. The rates were dropped and people found their incomes affected very severely,” she said of the antitrust ruling.Vestager, who previously served as Denmark’s economy minister, is clearly sympathetic to labor rights, saying she comes “from a country which has had built a success on a model” based on the right to unionize. Regulators are looking at exemptions from competition law “to make sure that people who are not really independent” or self-employed “actually can unionize and be a much stronger force in negotiations.”Vestager has previously flagged the rights of workers on tech platforms as an area that deserves scrutiny. However, the European Commission is set to move slowly, suggesting ways to improve labor conditions for platform workers next year, according to a strategy document published in February.There are limits to who Vestager is looking out for. “We would not want dentists and lawyers” and professions in a more powerful position be able to gain the same advantage as more vulnerable workers who depend on an internet website for their livelihoods, she added.To contact the reporters on this story: Aoife White in Brussels at firstname.lastname@example.org;Giles Turner in London at email@example.comTo contact the editors responsible for this story: Anthony Aarons at firstname.lastname@example.org, Peter Chapman, Molly SchuetzFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Weeks after Uber exited India's food delivery market, conceding defeat to local giants Swiggy and Zomato, a new player is gearing up to challenge the heavily-backed duopoly: Amazon. The e-commerce giant plans to enter the Indian food delivery market in the coming weeks, a person familiar with the matter told TechCrunch. The launch of the service, which would be offered as part of either Amazon's Prime Now or Amazon Fresh platform, could happen as soon as next month, we are told.
French startup Cityscoot is raising a $25.6 million (€23.6 million) funding round from Allianz France, Demeter as well as existing investors Groupe RATP and Banque des Territoires. Cityscoot is a free-floating electric scooter service (moped scooters). With today’s funding round, the startup plans to expand to two new European cities, starting with Barcelona in May 2020.
Collective Benefits is a startup aimed at tackling this growing "protection gap" created by the gig economy where so-called "self-employed" workers must often go without basic benefits such as family leave and sick pay, not to mention mental health support and critical injury pay. Collective Benefits has set out to build a tech platform that gives gig workers access to a full range of affordable, portable protections and benefits which they can carry around with them between the platforms they work on. It’s also working with a number of on-demand service platforms who are giving their workforces access to these benefits.
(Bloomberg) -- Indonesia’s Gojek denied a report that it’s discussing a merger with rival Grab Holdings Inc., a deal that would combine the leading ride-hailing businesses in Southeast Asia.“There are no plans for any sort of merger and recent media reports regarding discussions of this nature are not accurate,” Gojek said in an emailed statement Tuesday.Management teams from the two companies have talked occasionally over the past few years about a deal, and Grab President Ming Maa and Gojek Co-Chief Executive Officer Andre Soelistyo met earlier this month for the latest discussion, The Information reported, citing people familiar with the matter. While talks are believed to be ongoing, a big roadblock to a deal is agreeing on control of the combined entity, according to the report.Any deal would also likely face regulatory hurdles because it would combine the top two players in the region, reducing competition in ride-hailing and newer fields like food-delivery and finance. Grab and Gojek, valued at $14 billion and $10 billion respectively, used to compete with Uber Technologies Inc. before the U.S. company sold its operations in the region to Grab in 2018, retaining about a 27.5% stake.That deal drew the ire of regulators, who weren’t given a say ahead of time. Singapore ultimately fined Uber and Grab the equivalent of $9.5 million, but let the combination stand.A Grab spokesperson declined to comment on the report.To contact the reporter on this story: Yoolim Lee in Singapore at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Edwin ChanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Lyft did not comment on the financing of the deal. Halo Cars was founded in 2018 and has operations in U.S. markets such as New York and Chicago. Lyft and larger rival Uber Technologies Inc, both based in San Francisco, are pursuing different roads in search of profitability, with Uber pouring money into side businesses which have so far lost money and Lyft focusing solely on moving people around.
(Bloomberg) -- A pivotal moment next week for at-home fitness provider Peloton Interactive Inc. could conjure up memories of last year’s releases of newly-issued stock by technology companies -- moves that rattled investors and led to heightened volatility for Lyft Inc. and Uber Technologies Inc.Come Monday, some 90% of Peloton’s shares outstanding will be freed up, opening the first window for insiders and early investors to sell since the company’s September initial public offering. This particular lock-up -- similar to Lyft’s -- expires short of the traditional 180-day lock-up period that most companies follow.Meanwhile, Peloton shares at the recent close of around $27 are below its $29 IPO price. Analysts cited the early lock-up as a near-term risk to shares. MKM’s Rohit Kulkarni, in a report published Friday, said that unlike Uber and Lyft, almost all locked-up shares as well as vested stock options “have significant positive returns,” which could lead to downward pressure in the near-term.Lock-ups “created volatility for other recent tech IPOs,” in anticipation of pent up selling pressure, although the stocks tended to bounce back in the days following the expiration, BofA analyst Justin Post said in a telephone interview.Recalling Lyft and Uber’s volatility around their lock-up expirations, Raymond James analyst Justin Patterson said that it “coincided with negative regulatory headlines. And unique to Uber was a former executive selling fairly aggressively into the market.” By contrast, Peloton’s founders remain at the company.The date was moved up because Peloton’s lock-up expiry would have fallen during a blackout period that would bar insiders from selling, according to a Feb. 5 filing submitted to the Securities and Exchange Commission when the company reported earnings. A highlight of the filing was the company’s estimate of shares outstanding -- 317 million. That figure includes options that have or will be vested as of Feb. 24, as well as some 273 million convertible Class B shares eligible to be sold in the public market.Analysts using the 280 million shares outstanding that were cited in Peloton’s quarterly report have some math homework to do before Monday.Based on JPMorgan’s estimate of roughly 277 million shares that will unlock for insiders and early investors, about 87% of Peloton’s estimated 317 million shares outstanding stands to be freed. That would include 144 million shares held by affiliates and 133 million shares held by non-affiliates.Tiger Global Management and Peloton Chief Executive Officer John Foley are among the largest affiliates, with roughly 15% and 6.1% holdings respectively, according to JPMorgan. Technology Crossover Ventures (TCV) has 6%. Fidelity, which owns 5% of shares outstanding, and Comcast, with 3.3%, are not counted among affiliates, according to JPMorgan. Tiger Global and Fidelity declined to comment. TCV deferred to the company to answer questions while Peloton declined to comment.To contact the reporter on this story: Crystal Kim in New York at email@example.comTo contact the editors responsible for this story: Brad Olesen at firstname.lastname@example.org, Scott Schnipper, Cristin FlanaganFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- A year ago Richard Branson was on his private island, Necker, when the former Twitter executive Adam Bain came to see him with a proposal for how to take Branson’s suborbital space travel company public.The bearded British billionaire is doubtless glad he took the meeting: After an unsteady start, Virgin Galactic Holdings Inc.’s valuation has rocketed. The stock has surged more than 400% since a low in December, valuing the company at close to $8 billion, or almost 2,000 times the revenues it’s estimated to have generated in 2019. (For comparison, Uber Technologies Inc. trades on about 5.5 times last year’s revenue).Vieco USA, a Virgin-controlled entity, still owns more than half of the shares,(1) meaning Branson’s net worth — estimated by the Bloomberg Billionaires Index at about $5 billion before the listing — is suddenly a whole lot bigger. The loss-making company is now his most valuable asset. There haven’t been any big company developments to justify such market euphoria, which makes you wonder whether it’s sustainable. The stock gains since the start of this year are about double those enjoyed by Tesla Inc.’s rip-snorting shares.Several hedge funds, including Suvretta Capital Management, which owns 3.4% of Virgin Galactic’s equity, have profited from the surge but plenty of its peers are betting that a meeting with cold reality is inevitable. About 30% of the free float has been shorted, according to IHS Markit data. This space battle isn’t for the fainthearted, and there’s a danger that overenthusiastic retail investors end up getting hurt. On Thursday, the stock rose as much as 13%, erased all those gains, then fell as much as 18%, before closing broadly unchanged.In fairness, Virgin Galactic’s technical achievements are impressive, even inspiring. Branson’s company has spent years perfecting its product, giving it a head start in the nascent space tourism business. At $250,000 a ticket for a 90-minute flight (including a few minutes of zero-gravity weightlessness) it could prove to be pretty lucrative. The company might have almost $600 million of yearly revenue by 2023, according to a management projection.But, as I’ve noted before, a lot can go wrong when your business is carrying tourists into suborbital space and twitchy regulators are poring over your every move. Any unexpected delays or interruptions (never mind an accident) would cause the stock to swiftly lose altitude.As with Elon Musk’s Tesla faithful, Virgin Galactic’s fans don’t seem too bothered by these near-term challenges. One hope among investors is that the company will use the technology and experience gained from ferrying tourists into space to build a potentially far more lucrative market: intercontinental hypersonic flight.Yet the regulatory hurdles to launching such flights will be daunting. Perfecting the technology will require much more than the $430 million in net proceeds that Virgin Galactic received from the listing.(2)It’s conceivable, then, that the huge run-up in the stock — if sustained — might tempt Branson to raise more money, just as Tesla did last week with a $2 billion stock offering. The investor enthusiasm shown for Branson’s company won’t have escaped Musk’s attention either. His Space Exploration Technologies Corp. (SpaceX) has had no trouble raising money in private markets; it’s been valued at about $33 billion. But the Tesla founder is also considering a public offering of SpaceX’s internet offshoot, Starlink, in a few years, and any market fervor around space investing would make that easier. A hard landing for Virgin Galactic investors could change the dynamic.For now, Branson could afford to splash out on another private island if he wanted. Or maybe some acreage on the moon. (1) Vieco owns a 58.6% stake and Branson is the beneficial owner of 80.7% of that, according to this filing.(2) Virgin Galactic could receive a further cash boost if warrants conveying the right to purchase a total of 31 million shares are exercised for cash.To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Masayoshi Son will head to New York next month for the first time since the implosion of WeWork, seeking to persuade hedge funds and institutional investors that the fortunes of SoftBank Group Corp. have turned since the disastrous investment.The Japanese billionaire is scheduled to address investors on March 2. There, he could point to the approved sale of Sprint Corp., a rally in Uber Technologies Inc. shares and Elliott Management Corp.’s purchase of SoftBank stock as signs of progress at his company, said people familiar with the plans. It’s unclear where WeWork will fit into the agenda.Within SoftBank, there’s disagreement about how to convey the company’s strategy. Son, 62, is known for his eccentric financial presentations, which have included a “hypothetical illustration” of WeWork profitability and stock photos of ocean waves and calm waters. One memorable slide from 2014 contained only a drawing of a goose and the words: “SoftBank = Goose.” Many staff at headquarters in Tokyo love the founder’s showmanship, but some senior executives are exasperated and argue a clearer and more sober message is needed, said people familiar with internal discussions who asked not to be identified because the matter is private.Ultimately, Son will decide. He has downplayed any pressure from Elliott, a New York-based activist investor that disclosed a nearly $3 billion stake in SoftBank this month. Son called Elliott an “important partner” and said he’s in broad agreement with the investor’s arguments for buybacks and increasing the stock price. Son has signaled less receptiveness to Elliott’s other suggestions: selling more of the stake in Alibaba Group Holding Ltd. and reining in the Vision Fund, a $100 billion investment vehicle that accounted for more than $10 billion of losses in the past two quarters.In private meetings with SoftBank, Elliott raised issues over the clarity of SoftBank’s strategy, people familiar with the talks said. SoftBank is planning to make hires within its investor relations department to help shape the message to shareholders. SoftBank declined to comment. A spokesperson for Elliott declined to comment.“Right now, serious heat is being applied on Son,” said Justin Tang, head of Asian research at United First Partners in Singapore. “Son has to be seen actually doing something.”Son’s heading into the meeting with one win under his belt: T-Mobile US Inc. and Sprint have agreed to new terms for their pending merger, a key step toward completing a transaction that will unload the loss-making carrier and unlock new capital for SoftBank. Its shares rose as much as 3.3% in Tokyo Friday.T-Mobile, Sprint Renew Deal as Merger Clears Regulatory HurdlesAlthough next month’s event was scheduled before Elliott disclosed its stake and is not designed to specifically address the activist investor’s involvement, it will be a focus for attendees, said people familiar with the preparations. Executives are bracing for questions about Elliott’s intentions and how far the shareholder will go to boost the stock’s value.Goldman Sachs Group Inc. is organizing the March event, the people said. The firm, which helped Japan’s Sony Corp. and Toshiba Corp. in their dealings with activist investors, is vying for the job of advising SoftBank on Elliott, said a different person said. However, SoftBank is likely to manage the relationship in-house, another person said. The job may fall to Marcelo Claure, the chief operating officer who’s helping oversee the WeWork debacle; Katsunori Sago, the chief strategy officer and a former Goldman Sachs executive; or Ron Fisher, a director and trusted adviser to Son. A Goldman representative declined to comment on SoftBank.Dogs and PizzaSoftBank is recovering from a series of stumbles in recent months. WeWork’s plan to go public last year imploded, forcing SoftBank to arrange a rescue financing of $9.5 billion in October. Uber, despite a two-month surge, is still trading about 10% below last year’s offering price. The Vision Fund has suffered other high-profile setbacks, including investments in failed online retailer Brandless Inc., dog-walking app Wag Labs Inc. and pizza robot company Zume Pizza Inc.Elliott has said it took the stake in SoftBank because the Japanese company’s shares are woefully undervalued compared with its assets. Son himself has been pleading the case with increasing frequency. SoftBank’s own sum-of-parts calculation puts its total value at 12,300 yen a share ($111). That’s more than double SoftBank’s actual share price, which values the company at about $104 billion. Elliott has pegged SoftBank’s net asset value at about $230 billion, people familiar with the discussions have said.The disconnect between what SoftBank and Elliott say the company is worth and the market value can be explained by several quirks of how the business is run, according to a report from Pierre Ferragu, an analyst at New Street Research. Many shareholders would like the company to return more capital and improve its governance, he wrote. Risks associated with the Vision Fund and a lack of details about tax liabilities associated with cashing out its investments are other factors.SoftBank recognized the need for more oversight as early as 2018, when it charged Claure with a broad review of operations across SoftBank companies. Claure, the former head of Sprint, spent months assembling a team of about 40 executives. In the end, he was forced to cede control of the so-called SoftBank Operating Group to the man it was supposed to be overseeing: Rajeev Misra, the head of the Vision Fund.Elliott wants SoftBank to set up a special committee to review investment processes at the Vision Fund. Elliott argues the fund has dragged down the share price despite making up a small portion of assets under management, said people familiar with the discussions.Some at SoftBank are resistant to the idea of an oversight committee. Instead, SoftBank is seeking to resolve issues at the Vision Fund with new governance standards for the companies it invests in. The new rules will encompass how the fund approaches the composition of the board of directors, founder and management rights, rights of shareholders, and mitigation of potential conflicts of interest.Son has conceded that missteps with the original fund is making it difficult to raise money for a successor. He said last week that SoftBank may need to invest in startups using solely its own capital for a year or two.‘Black Swan’Elliott is also calling for a buyback of as much as $20 billion. A repurchase of that scale could boost SoftBank’s shares by 40%, Ferragu estimated. SoftBank’s last share repurchase was announced about a year ago, a record 600 billion yen. It sparked a rally that pushed the stock to its highest price in about two decades.Selling Alibaba shares to pay for a buyback, as Elliott has proposed, could be a point of contention with Son. In the past, Son has used the shares as collateral to borrow money for big acquisitions, including the $32 billion purchase of chip designer ARM Holdings. Son said last week during a quarterly financial briefing that he’d prefer to sell as little as possible and that there’s “no rush” to do so.SoftBank said on Wednesday it plans to borrow as much as $4.5 billion against shares of its Japanese telecom unit. The company, which had 3.8 trillion yen of cash and equivalents at the end of December, said it was raising capital for operations. SoftBank’s debt load exceeds $120 billion.Son’s reliance on debt is raising alarms, said Tang, the financial analyst. “He’s going to get wiped out if there is some black swan event,” Tang said. “SoftBank needs to de-leverage, and the best way to do it is to sell the Alibaba stake.”Elliott has a tradition of using strong-arm tactics to get its way with target companies, but there’s little chance of that happening with SoftBank. Elliott’s stake enables it to call an emergency shareholder meeting, but pushing through a proposal without the founder’s backing is a long shot. Son, who often goes by the nickname Masa, controls more than a quarter of SoftBank stock through various vehicles, and the company bylaws require two-thirds of votes to pass any proposal made through the board, according to a person with knowledge of the rules.“Unless everyone is against him,” said Tang, “it’s not possible to dislodge Masa.”(Updates with share action in the seventh paragraph)\--With assistance from Scott Deveau.To contact the reporters on this story: Pavel Alpeyev in Tokyo at email@example.com;Giles Turner in London at firstname.lastname@example.org;Takahiko Hyuga in Tokyo at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Mark Milian, Colum MurphyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Mitsubishi UFJ Financial Group Inc. is investing more than $700 million in Southeast Asian ride-hailing giant Grab. It’s a three-way deal in which everyone gets what they currently lack.The Japanese megabank and the Singapore-headquartered “superapp,” a one-stop online shop spanning food to finance, get to plug gaps in their businesses. They also keep one of Grab’s existing backers sweet: Softbank Group Corp.’s founder Masayoshi Son will avoid the possibility of an inconvenient cash call from one of his most promising unicorns.It's no secret that Japanese banks are under pressure to expand overseas as negative interest rates bite at home. Fast-growing Southeast Asia offers an alternative. But there's a catch. Consumer spending in countries like Indonesia, where MUFG owns PT Bank Danamon, is going digital very rapidly — the region’s internet economy is expected to triple to $300 billion by 2025. That’s a lucrative pie for all banks and fintech firms. However, Japan’s banks aren’t exactly known for their digital spurs. Backing Grab gives the biggest Japanese lender a chance to earn them. MUFG intends to market a range of financial services from insurance to loans to Grab’s users, Taiga Uranaka of Bloomberg News reported Wednesday. What’s in it for Grab? After acquiring Uber Technologies Inc.’s Southeast Asian operations two years ago, Grab is transforming itself from a ride-hailing service into an umbrella app with finance at its core. It hopes to pick up an online-only banking license in Singapore this summer. That alone will require Grab and its partner Singapore Telecommunications Ltd. to bring S$1.5 billion ($1.1 billion) in capital. Expanding the model elsewhere will be tricky if the unicorn relies too much on SoftBank and its Vision Fund, which it tapped for $1.5 billion last year.Enter MUFG, which has plenty of capital to underwrite credit risk in Indonesia, Thailand and the Philippines — countries where it already controls local retail banks. Those units can score borrowers looking for loans on the Grab app, as well as put up the actual funding. Having the regional network of a deep-pocketed Japanese institution in its corner should help Grab compete better against rival superapp Gojek, which has allied itself with Singapore's largest lender, DBS Group Holdings Ltd.(1)As for SoftBank, there must be huge sighs of relief all around. A core startup in its $100 billion Vision Fund’s portfolio won’t be relying on it for more cash. That’s one less mouth to feed in the wake of disastrous bets like office-sharing group WeWork — on which SoftBank took a $4.6 billion writedown — and dog-walking app Wag. SoftBank last week reported a 99% slump in operating profit for the quarter ended Dec. 31, and unveiled plans Thursday to borrow as much as 500 billion yen ($4.5 billion) by putting up shares of its Japanese telecom unit as collateral. Amid widening losses and mass layoffs at Oyo Hotels and Homes, a big SoftBank bet in India, funding Grab’s ambitious expansion is probably beyond Son’s present reach. And Grab must know that constraint.Yet, as Morningstar Inc. analyst Michael Makdad puts it, SoftBank is one of the biggest corporate borrowers for Japanese banks, one no large lender can afford to ignore or annoy. Writing a check for Grab gives MUFG a welcome chance to iron out any wrinkles from last year when it reportedly balked at contributing to a rescue package for WeWork. Learning new digital banking skills it can bring to its home market will be a bonus. Grab has plenty of room for Masa and his bankers to share the ride. (1) Interestingly, MUFG's leasing affiliate invested an undisclosed sum in Gojek last year.To contact the authors of this story: Nisha Gopalan at email@example.comAndy Mukherjee at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Uber Technologies, Inc. (NYSE: UBER) announced today that Dara Khosrowshahi, Chief Executive Officer, will participate in a keynote at the Morgan Stanley 2020 Technology, Media & Telecom Conference on Wednesday, March 4th. Mr. Khosrowshahi is scheduled to appear at 9:45 A.M. Pacific Time (PT).
Uber Technologies Inc resumed transporting passengers in Colombia on Thursday with a new service model that allows users to rent cars with drivers, just 20 days after it exited the Andean country following a ruling by regulators which the company described as arbitrary. The Superintendency of Industry and Commerce (SIC), which regulates fair competition and protects consumers, in December ruled Uber had violated competition rules. Uber said on Feb. 3 it was considering taking the ruling to international arbitration, noting that it violated a U.S.-Colombia trade deal and that damages from suspending its service could exceed $250 million (194.13 million pounds).