Friday 5 April 2019 3:50 pm

Morgan Stanley selected to steer Uber through $120bn IPO

Morgan Stanley has reportedly been chosen to ensure Uber has a smooth ride through its initial public offering (IPO) after a string of volatile tech floats have set nerves jangling.

The ride-hailing app has named the US investment bank as stabilisation agent for its eagerly-awaited IPO, Bloomberg reported, citing people familiar with the matter.

Read more: Lyft IPO paves way for flurry of tech floats in 2019

Stabilisation agents are brought in to help shore up a stock in its first few hours of trading.

The lucrative role includes overseeing a so-called green shoe option, where underwriters can buy additional shares in a bid to stabilise the price.

The move comes after shares in rival ride-hailing app Lyft suffered a volatile first few days of trading after going public last week.

Lyft’s shares rose almost nine per cent on their first day of trading, signalling strong demand from investors. But the stock plunged below its IPO price the following day, sparking doubts about the firm’s $24bn (£18bn) price tag.

Peer-to-peer lender Funding Circle also suffered a torrid debut when it listed on the London Stock Exchange in October.

The turbulent tech firm IPOs have raised eyebrows among analysts, with many questioning the hefty valuations on companies that have yet to turn a profit.

Goldman Sachs and Bank of America are the lead underwriters for Uber’s float alongside Morgan Stanley, according to the report. Barclays, Citigroup and Allen & Co are also said to be assisting the IPO, which could value Uber at as much as $120bn.

Read more: Lyft takes a wrong turn as shares fall below float price

Uber is reportedly set to launch its investor roadshow as soon as late April, as the company looks to win over support for its float. Uber and Morgan Stanley have been contacted for comment.

Separately, Goldman Sachs has been named as stabilisation agent for the upcoming IPO of social media platform Pinterest, Bloomberg reported.