Uber Technologies Inc. took another step further away from its contentious past, symbolically anyway, as former CEO Travis Kalanick sold nearly $550 million worth of the company’s stock.
Kalanick, according to a filing with the Securities and Exchange Commission, sold almost 21% of his stake in the ride-hailing company he helped found in 2009. He sold more than 20 million shares with an approximate value of $547 million, Reuters reported.
He left the company in July 2017, forced out by its board of directors after a short leave of absence. Kalanick’s tenure as CEO was difficult at the end as he was seen as fostering a corporate culture that was sexist and was described by some as college fraternity-like. The final straw came after a video was released showing his verbally abusing an Uber driver.
He sold the holding after a lockup period ended Wednesday on 1.7 billion shares that were restricted. Kalanick now owns about 75.4 million shares of the company, which has a value of more than $2 billion. The stock price dropped to $25.58 when it happened.
The San Francisco-based company’s shares were down slightly at $27 a share in late afternoon trading Monday. Reuters noted the company’s shares have fallen 41% since the company went public in May. It was an IPO that held such promise, until a few things happened that allowed some doubt to creep in.
The doubts began to form after the lukewarm reception for rival Lyft’s own stock offering. Uber performed even more poorly, plunging almost immediately after trading began. While the stock did move up slightly from its opening day, it had nowhere near the sort of bounce that tech companies traditionally anticipate.
A slew of issues have transpired to keep the company from realizing the potential investors hoped it would realize. The company has been a continual money loser, which is not all that unusual in this space, the losses have gotten larger.
Uber reported a record second-quarter operating loss of $5.4 billion. The loss includes more than $4 billion in one-time charges for the IPO. However, even without the offering-related charges, Uber suffered $1.2 billion in operating losses. The company reported a $1.2 billion third-quarter loss.
That was followed up by a significant job cuts, as Uber announced in August it was cutting more than 400 positions, most of them in the company’s marketing department.
Profitability for the ride-hailing giant is “a few years away,” said Uber’s Chief Technology Officer Thuan Pham during a tech conference in Hong Kong in June. “We have local competitors everywhere trying to aggressively expand to grow their business, and we have to compete vigorously.”
In the U.S. alone, Lyft and Waymo are the biggest names looking to wrestle rides away from the company. Internationally, rivals like India’s Ola and China’s Didi Chuxing are competing for rides in hundreds of cities, often forcing a race to the bottom price-wise that crimps profits.
Additionally, the company has been combatting a variety of other issues since CEO Dara Khosrowshahi took over at the end of August 2017, including safety issues involving drivers, battles with municipalities about their ability to operate, and a wrestling match with Waymo about technology and other issues. The two sides eventually settled those problems, allowing each to move forward.
Pham did give shareholders something to look forward to when it comes to the company’s long-term viability. “Our model is more like Amazon, where we have lots of transactions and maybe make a few pennies per transaction,” Pham said. It may not all bad if that’s the case as Amazon reported a profit of $10.1 billion in 2018.