Uber's former CEO said to cash in at $1.4B in Softbank deal
As a consortium led by Softbank closes a deal to buy a 20 percent stake in Uber, it's looking like some people are about to get very rich.
Former Uber CEO Travis Kalanick is cashing in.
The world looks like it's about to get a new billionaire: former Uber CEO Travis Kalanick.
Uber has confirmed that it closed its deal Thursday with a consortium led by Japanese internet giant SoftBank Group, selling the consortium a 20 percent stake in the ride-hailing business. Once the deal is officially done, Kalanick will walk away with $1.4 billion, according to CNBC.
The agreement comes at a time when Uber is working to clean up after a year of scandals, which involved everything from sexual harassment allegations to five federal investigations to a trade-secret theft lawsuit from Waymo, the self-driving car unit owned by Google parent company Alphabet. Kalanick was ousted from Uber in June, and former Expedia CEO Dara Khosrowshahi took over in August.
In November, San Francisco-based Uber confirmed the deal led by Softbank, and said it had agreed to sell $10 billion of its stock to the Japanese company. Softbank is buying a 15 percent stake, and other investors will buy another 5 percent stake, in accordance with the deal.
Once the deal officially closes, Softbank will be Uber's largest shareholder. A primary investment of $1.25 billion closed on Thursday, according to Uber, and payments for secondary sales will be processed by the Nasdaq Private Market and disbursed to participants throughout the day.
"We are very pleased to have successfully closed the Uber investment and appreciate the support and professionalism of the board, management team and shareholders who made this transaction possible," Rajeev Misra, CEO of SoftBank Investment Advisers and director at SoftBank Group Corp., said in a statement. "Uber has a very bright future under its new leadership."
The shuffling of shares will reportedly drop Uber's value from about $68 billion to $48 billion. Uber is still a private venture-backed company, but Khosrowshahi said he plans to take it public by 2019.
"We're proud to have SoftBank, Dragoneer and the entire consortium in the Uber family," an Uber spokesman said in a statement. "This is a great outcome for our shareholders, employees and customers, strengthening Uber's governance as we double down on our technology investments and continue to bring our services to more people in more places around the world."
With the closing of the deal, Softbank will get two seats on Uber's board of directors, effective immediately, according to Uber.
In October, the board voted to add six new members, which would expand its number of board members to 17. It also eliminated its super-voting structure, in which early shareholders had 10 times the voting power, to a one vote per share model. This means the board can now curb the influence of some early investors and limit the overall power of Kalanick.
Kalanick didn't respond to a request for comment.
First published Jan. 18, 11:47 a.m. PT.
Update, 12:41 p.m.: Adds comment from Softbank's Rajeev Misra.
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