End Of An Era As Kalanick Dumps Uber Shares And Leaves The Board
All the way back in 1994, Travis Kalanick launched his first business. It was an SAT-prep tutoring service called New Way Academy. Kalanick created a course called "1500 and over," claiming the first person who used it increased their SAT score by 400 points.
Over the following years Kalanick was involved in various startups. Scour, which was a peer-to-peer file sharing service, filed for bankruptcy after a $250 billion lawsuit for copyright infringement. Red Swoosh, which was his second attempt at a peer-to-peer file sharing service, was acquired by Akamai Technologies in 2007 for $19 million.
The following year, Kalanick attended the LeWeb technology conference where he met Garrett Camp and first heard of the idea for Uber. Camp, despite receiving a large payday for selling StumbleUpon, had spent $800 for a black car service and wanted to come up with a way to bring down the cost. A few months later, UberCab was founded with Kalanick joining the company as "mega advisor."
"When you open up that app and you get that experience of like, 'I am living in the future. I pushed a button and a car rolled up and now I'm a frickin’ pimp,' Garrett is the guy who invented that shit," Kalanick once said at an Uber event in its early days.
Just over a year after it was founded, in May 2010, Uber went live in San Francisco. Kalanick was named CEO later that year and the company began expanding to new cities and pulling in VC money at a torrid pace. Within three years, the company received funding at a valuation of $3.5 billion. The next three years saw a who's who of investors throw money at the company, receiving sequentially higher valuations of $17 billion, then $40 billion, then $50 billion and then $62.5 billion.
Uber appeared unstoppable. Despite a list of criticism that is too long to describe here, it was tearing apart the cab industry and created an entire new group of companies describing themselves as "the Uber of X." However, in June 2017, turmoil struck Uber as Kalanick took an indefinite leave of absence following an investigation into a blog post earlier that year by a former employee who detailed instances of harassment. The 13-page report found a toxic environment that didn't have procedures to prevent sexual harassment, bullying and other poor behavior. Exactly one week later, Kalanick resigned from the company he co-founded.
"I love Uber more than anything in the world and at this difficult moment in my personal life I have accepted the investors request to step aside so that Uber can go back to building rather than be distracted with another fight," Kalanick said at the time.
Earlier this year, Uber finally went public at an $82 billion valuation, the low end of the anticipated range. Since the IPO, shares of Uber have declined by 32%, bringing the company's market capitalization to just over $50 billion—marginally higher than its private market valuation in 2015.
Since the lockup period expired last month, Kalanick has been dumping shares at a furious pace. We now know why. Kalanick announced he is stepping down from Uber's board of directors effective December 31. It was also confirmed that Kalanick has now completely sold his stake in Uber, marking the first time since the company was founded that he doesn't own shares in the company.
"At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits. I’m proud of all that Uber has achieved, and I will continue to cheer for its future from the sidelines," Kalanick said in a statement.
So while this marks the end of an era for Kalanick's ties to Uber, it's highly unlikely this is the last we hear of him with billions to his name and the ability to start new companies as quickly as one can hail an Uber.
Is Neumann the greatest swindler ever? WeWork co-founder and former CEO appears to have pulled a quick one when negotiating his exit from the company. Already under fire for walking away with $1.7 billion as thousands of employees got laid off, Neumann struck a deal that could see him gain another $352 million in stock if WeWork achieves a $15 billion valuation as a publicly traded company. According to the Financial Times, WeWork quietly reclassified as an LLC before the failed IPO. In doing so, Neumann became entitled to "profits interests," which grant him free shares that vest if the company hits a pre-determined valuation known as the "catch-up price."
Maybe it's time for criminal charges. Documents that include messages between Boeing employees detailing a "very disturbing picture" about the 737 MAX were turned over to the U.S. Federal Aviation Administration. The messages have yet to be publicly released, but are believed to be from the same pilot who voiced concerns about the airplane in 2016. "But similar to other records previously disclosed by Boeing, the records appear to point to a very disturbing picture of both concerns expressed by Boeing employees about the company’s commitment to safety and efforts by some employees to ensure Boeing’s production plans were not diverted by regulators or others," an aide to a House committee said in a statement.
More competition for Tesla. Electric vehicle startup Rivian has raised $1.3 billion, with T. Rowe Price leading the round as Amazon, Ford and BlackRock also participated. Rivian, which was founded in 2009, plans to build a pickup and SUV by late 2020. With this funding round, Rivian has now raised $3.5 billion from investors to enter the crowded EV market. "This investment demonstrates confidence in our team, products, technology and strategy," Rivian CEO R.J. Scaringe.
TikTok is not for sale. Following a Bloomberg report on Monday that ByteDance was considering selling the hit app TikTok, the company has struck back denying the rumor. "From time to time you may read stories in the media that are not true. Today there is an inaccurate report claiming that ByteDance has considered selling part or all of TikTok," TikTok CEO Alex Zhu told employees. A spokesperson for ByteDance, which owns TikTok, said there had "been no discussions about any partial or full sale of TikTok."
Most of it went to those at the top. The global stock market has added more than $17 trillion in value in 2019, according to Deutsche Bank. Global equities began the year with a value of less than $70 trillion, but have since exceeded $87 trillion. The increase in value has been largely driven by gains in the U.S., where the S&P 500, Dow Jones Industrial Average and Russell 2000 have each returned more than 20% so far this year.