The question is wrong. It’s not “What’s Uber Worth?” because the premise that Softbank paid two different prices for the SAME share of stock is wrong. I would posit that Softbank paid a different price for two different securities. The new shares bought from the company have a liquidation priority ahead of earlier issued shares with a preference based on the $68B valuation that has been reported. The older shares bought from the existing investors have a liquidation priority after the new shares receive their preference and then have a lower preference based on the valuation at the time those shares were originally sold. Because these shares are treated differently in a liquidation event, the question is whether the ROI of the two shares bought at different prices is the same.
Using the public market valuation methodology of Price Per Share x Fully Diluted Shares = Valuation only works when each of the Fully Diluted Shares receives the same value in a sale, which is not true in a private company with multiple classes of different preferred stocks.
Bradford Harries is a partner of Chessiecap Securities, a FINRA registered broker-dealer that provides investment banking services including capital raising, M&A and other corporate finance services. He is a graduate of Stanford University with an AB in Economics and MBA. His Wall Street career began in 1979 and has particular expertise with respect to technology and emerging growth industries.