Mutual Funds Mark Down Uber Investments by Up to 15% -- Update

By Rolfe Winkler and Greg Bensinger 

Four mutual-fund companies have marked down their investments in Uber Technologies Inc. by as much as 15%, the first such price cuts that suggest these investors are souring on the ride-hailing giant following a scandal-ridden year.

Vanguard Group, Principal and Hartford Funds all marked down their shares by 15% to $41.46 a share for the quarter ended June 30, according to the fund companies' latest disclosure documents. T. Rowe Price Group Inc. cut the estimated price of its Uber shares by about 12% to $42.70 for the same period.

Uber's shares don't trade publicly, so the mutual-fund companies that hold them must estimate the shares' worth each quarter. Seven mutual-fund companies had mostly maintained a $48.77 share price since the fourth quarter of 2015, when Uber first sold its shares to investors at that price.

Fidelity Investments held its estimate of $48.77 as of June 30. The one outlier is BlackRock Inc., which wrote up the shares slightly each of the past two quarters, settling at $53.88 as of June 30.

Uber didn't have immediate comment. The mutual-fund companies couldn't immediately be reached or didn't have immediate comment.

Uber, which is valued at about $68 billion, has struggled to rebound from a string of scandals, executive departures including the ouster of its CEO, and a blockbuster lawsuit from rival Alphabet Inc. over allegedly stolen trade secrets. The company faces a continued fallout from a probe into its culture after allegations of sexual harassment and sexism.

Uber's board, meanwhile, is trying to fill the CEO position after Travis Kalanick resigned in June under investor pressure. But the search is in flux after one of Uber's biggest investors, Benchmark Capital, sued Mr. Kalanick in an effort to oust him from the board. The legal feud began earlier this month subsequent to the mutual-fund filings' June 30 ending date, and has since spiraled into a broader battle among shareholders.

Benchmark has been negotiating for months a potential deal with tech investor SoftBank Group Corp. to sell part of its stake at a discount to Uber's last valuation, according to people familiar with the matter. Benchmark and SoftBank have declined to comment.

Amid all the controversies, Uber has sought to shore up its financials after reporting a loss of more than $3 billion last year and $708 million in the first quarter, according to people familiar with the matter. The company in July combined its money-losing Russian operations with Yandex NV's Yandex. Taxi, the more popular ride-hailing firm there. Uber is also winding down its U.S. subprime auto-leasing business after realizing losses per vehicle were $9,000 on average, 18 times what was previously believed, according to people familiar with the matter.

Uber still had about $7 billion in cash at the end of the first quarter, these people said, and its revenue totaled over $3 billion in the three-month period, up 18% from the fourth quarter.

Write to Rolfe Winkler at [e-mail] and Greg Bensinger at [e-mail]

(END) Dow Jones Newswires

August 22, 2017 20:00 ET (00:00 GMT)

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