Talks over a $3 billion investment from Warren Buffett in Uber Technologies Inc. fell apart earlier this year over terms and the deal size, according to news reports Wednesday.
In the proposal, Buffett’s Berkshire Hathaway Inc. BRK.A, +2.10% BRK.B, +2.23% would have provided a convertible loan that would have given the famed investor significant exposure to potential upside in the ride-hailing giant, while limiting his risk, according to anonymous sources cited by Bloomberg News.
“Some of the reported details are not correct,” Buffett later told CNBC. “But it’s true that Berkshire had discussions with Uber.”
Buffett added that he’s a “great admirer” of Uber Chief Executive Dara Khosrowshahi.
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A successful investment by Buffett could have given Uber a much-needed publicity boost, as companies such as Apple Inc. AAPL, -0.21% and Teva Pharmeceuticals TEVA, +0.51% have recently received stock boosts after Buffett’s increased stakes were revealed.
Japanese tech investor SoftBank Group Corp. 9984, +0.23% , which holds a 15% stake in Uber, bought $6.5 billion worth of the company’s stock in January at a $48 billion valuation. The company announced that several investors will seek to buy $400 million to $600 million of Uber stock at a $62 billion valuation.
Uber released its first-quarter results last week and said it posted adjusted losses of $577 million on net revenue of $2.5 billion, or a 67% jump in sales. Including a divestiture and a joint venture, the company said it logged net income of $2.5 billion on gross bookings of $11.29 billion.
The San Francisco-based company is private and its financial statements are not audited.
Berkshire class A stock was flat after hours and closed up 2.1% to $292,000 during the regular session. Berkshire class A stock is down 1.9% this year as the S&P 500 index SPX, +1.27% has gained 0.6%.
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Source: marketwatch.com | Original Link