Assessing value of a digital company: Uber’s IPO 2019

Theoretical basis Via this case, students are introduced to several alternative methods of valuation, including the valuation based on the “real options” theory. The novelty of the case is the link between valuation and the type of innovation that the company represents. The suggested valuation frameworks, which include both quantitative and qualitative assessments, are applicable not only in the context of an IPO valuation but also in the context of any kind of M&A activity. Research methodology This case was prepared mostly via secondary research. All the information about Uber and the industry was collected via publicly available sources. No internal documents of the company were used in the preparation of this case. The primary research consisted of an interview with the protagonist Catherine (whose name is disguised). Other disguised elements in the case include the name of the Value Investor conference organizer (Spyros Spyrou, not his real name), the country of the Value Investor conference (omitted) and the conference venue (Princess hotel, not any actual venue). Case overview/synopsis In 2019, Uber, the famous ride-sharing company, made waves in financial markets as the most controversial IPO valuation. With a wide range of proposed values, Uber puzzled investors, once again living up to its fame of a rebel and a disruptor. When Uber finally went public in May 2019, its IPO valuation stood at $82.4bn. The heated discussion in the media continued even after the IPO: “Is Uber worth this amount? Is there an upside potential for the investors who bought shares at the IPO price? What if this is a hype and markets are simply embracing higher valuations?” Complexity academic level This case can be used at the undergraduate, graduate (MBA) or executive level in finance-related courses such as Company Valuation or Valuing Innovation, which cover the topic of valuation and specifically the topic of valuing innovative companies.

Witnessing The Genetic Self: How Non-Specialists Use Reveal Videos To Approach Genetics And Race Through Direct-To-Consumer Genetic Ancestry Testing

This paper investigates the interpretation and expression at work when those without a higher education in genetics take a direct-to-consumer (DTC) genetic ancestry test (i.e. AncestryDNA) and then communicate this experience through online video on YouTube, most commonly through the Reveal genre of videos. Through non-random quota sampling a diverse corpus for analysis was created and then analyzed through the lenses of critical race theory, intersectionality, and María Lugones’s concepts of transparency and thickness, with focusing guidance from Gubium and Holstein’s narrative components to uncover how the test-takers approached genetics and race. The variations in how individuals approach their DTC genetic ancestry test results and communicate them through the videos, touching on topics such as race, family, self-identity, and stories, were discovered to work well alongside Roth and Ivemark’s recently presented genetic options theory.

Witnessing The Genetic Self: How Non-Specialists Use Reveal Videos To Approach Genetics And Race Through Direct-To-Consumer Genetic Ancestry Testing

This paper investigates the interpretation and expression at work when those without a higher education in genetics take a direct-to-consumer (DTC) genetic ancestry test (i.e. AncestryDNA) and then communicate this experience through online video on YouTube, most commonly through the Reveal genre of videos. Through non-random quota sampling a diverse corpus for analysis was created and then analyzed through the lenses of critical race theory, intersectionality, and María Lugones’s concepts of transparency and thickness, with focusing guidance from Gubium and Holstein’s narrative components to uncover how the test-takers approached genetics and race. The variations in how individuals approach their DTC genetic ancestry test results and communicate them through the videos, touching on topics such as race, family, self-identity, and stories, were discovered to work well alongside Roth and Ivemark’s recently presented genetic options theory.

Exploring the Link of Real Options Theory with Dynamic Capabilities Framework in Open Innovation-Type Merger and Acquisition Deals

Although it is well established that acquisition-based dynamic capabilities have important consequences for merger and acquisition (M&A) processes, direct evidence on how real option applications can measure a dynamic capability-based synergy in open innovation-type M&A deals has been scarce. This study draws from seminal research on real options theory to explore some of these benefits and limits to value a synergy in one recent highly strategic acquisition. To strengthen the identification of causal effects, the paper develops the proposition that justifies the role of dynamic capabilities as antecedents of the success of open innovation-type M&A deals in the ICT industry and demonstrates real options’ application to measure M&A synergies. To test the internal and external validity of the proposition, the explorative case study on Samsung’s acquisition of Harman International Industries was analyzed and interpreted. This study contributes important empirical evidence to bear on the literature on open innovation theory, dynamic capabilities framework, and real options theory.

Valuing Dynamic Capabilities-Based Synergies with Real Options

Acquisition-based dynamic capabilities have become well established as a new imperative for organizing mergers and acquisitions (M&A) processes. However, understanding the full benefits and possible limits of real options applications to measure a dynamic capability-based synergy in M&A deals remains a challenge. This paper draws on real options theory to explore some of these benefits and limits to value a synergy in two highly strategic M&A deals. More specifically, the author develops the proposition that justifies the role of dynamic capabilities as antecedents of the success of M&A deals in the information and communications technology industry and demonstrates real options application to measure M&A synergies.

IT Resources as Risk Mitigators

The study of the effects of IT investments on firm's performance has been a critical issue for research since the late 1980s. Different financial models have been used to clarify the contribution of IT investments, e.g. options theory. Some researchers rely on market prices, while others measure the effect on financial ratios. This work aims to provide additional insights regarding the influence of IT resources on performance. To do that, a new measure of performance is proposed that goes beyond the well-accepted profit. Several new links between IT literature, organization theory and financial theory are elicited.

Dysfunctionality of two-part transfer pricing in investment centers' performance assessment

The paper discusses the question of the ability of the two-part transfer pricing system to stimulate investment centers to reject projects with positive NPV and to accept projects with negative NPV when there is no external market for intermediate products. The study revealed under which circumstances investment centers can take such dysfunctional decisions and it investigated if these systems can be modified to eliminate negative effects of such circumstances. In order to solve these problems, methods of financial analysis, real options theory and theory of constraints were used and several hypothetical business situations were modelled to exemplify possible dysfunctional behavior of investment centers when strategic decisions are taken in a decentralized manner. The paper considers the reasons for taking such decisions, such as using average rates of resource costs in calculating the transfer payment, presence of the real options in related projects complex and breaking the five focusing steps of the theory of constraints.