Japan’s SoftBank has completed the purchase of a 20% stake in Uber. This has triggered a change in the board of directors of the company, and reduces the voting power held by ousted Uber founder Travis Kalanick. It also reduces the value of the company by a substantial about.
The sale of the shares to SoftBank has resulted in Uber’s market valuation to drop from $70 billion to $48 billion. In this case, it is understood that SoftBank is buying shares from investors at the reduced value; although it is also said to be buying 1 billion shares directly from Uber at the original $70 billion valuation.
What happens now is that Uber’s board of directors will expand from 11 to 17 people. Diluting the voting power of Kalanick and his allies. Especially as two of the new seats on the board will go directly to SoftBank.
ADVERTISEMENT
SoftBank has been investing heavily in new technologies over the last few years. It already has shares in Uber competitors Didi Chuxing and Grab; showing that it really isn’t bothered by dipping into companies trying to outdo each other. It has also recently purchased robot maker Boston Dynamics from Alphabet.
Didi Chuxing and Grab are in a partnership with US-based Lyft to limit the global reach of Uber. A partnership that seems to have paid off when Uber officially pulled out of Didi Chuxing’s home market of China. Having one company with so much influence over ride-sharing could cause the amount of competition to settle down.
[Source: The Verge]
Follow us on Instagram, Facebook, Twitter or Telegram for more updates and breaking news.
