An Uber Without A CEO Isn't Going Public Anytime Soon

Wall Street bankers have been salivating for some time over the prospect of an initial public offering by Uber, the most valuable tech startup in the world. Trying to predict an IPO can feel futile even in good times — the ride-hail company hasn't revealed any specific plans — but the decision on Tuesday by Uber CEO Travis Kalanick to take a leave of absence has clouded Wall Street's crystal ball.

Kalanick, engulfed by Uber's roiling sexual harassment crisis, and grieving his recently deceased mother, told employees in a memo that he would be taking "some time off of the day-to-day" for an indefinite period. During this leave, "the leadership team, my directs, will be running the company," he wrote. "I will be available as needed for the most strategic decisions, but I will be empowering them to be bold and decisive in order to move the company forward swiftly."

Kalanick in June.

Staff / Reuters

While no one realistically expected Uber to file to go public in the middle of a crisis, the prospect of leadership by committee effectively rules out an IPO in the near future, at least until Kalanick returns, market experts told BuzzFeed News. A successful IPO depends on telling a compelling story to investors, and having a strong leader is a virtual requirement.

"It needs to have a CEO almost as a figurehead," said Jared Carmel, managing partner of Manhattan Venture Partners, a boutique investment bank and fund manager. "You need leadership, you need confidence. You're asking Wall Street and Greenwich to invest in you. You need to instill confidence in the shareholder base."

Kathleen Smith, principal of Renaissance Capital, an investment management firm focused on IPOs, said she had never heard of a committee-led company going public. "I've never seen it, because it's such a bad idea," she said.

"Businesses don't run by committee, whether they're public or private," Smith added. "That's not going to be a sustained situation."

Still, reading between the lines of Kalanick's email, it appears that the Uber CEO may not be totally absent during his leave, Smith said. She noted that Kalanick said he'd still be available for "the most strategic decisions."

Kalanick may still be "calling the shots," Smith said.

By the time Kalanick does come back, he will be required to share some of his responsibilities with a chief operating officer, and his power will be checked by an independent chairperson, according to recommendations that the Uber board voted on Sunday to adopt.

Having a strong suite of executives surrounding Kalanick should be interpreted by Wall Street as positive, Carmel said. In that case, he said, "everyone can do what they do best."

An Uber spokesperson didn't immediately respond to a request for comment.

from BuzzFeed - Tech https://www.buzzfeed.com/williamalden/an-uber-without-a-ceo-isnt-going-public-anytime-soon?utm_term=4ldqpia