Uber is reportedly set to price its IPO at the midpoint of its target or below, giving it a valuation of as much as $86 billion

Uber is set to price its initial public offering at the midpoint of its target range or below, according to a Wednesday report from The Wall Street Journal that comes ahead of the ride-hailing giant’s expected Thursday pricing and Friday stock-market debut.

If Uber’s stock were to price at the midpoint of its expected range, at $47 a share, its valuation on a fully diluted basis would be about $86 billion, The Wall Street Journal’s report said, citing people familiar with the matter.

Uber last month said it planned to sell 180 million shares in its public offering at a price between $44 and $50 a share, which would value the company at $80 billion to $90 billion.

These numbers are well below the initial valuation expectations floated in earlier reports. Uber had sought a valuation as high as $120 billion, sources told Reuters last month.

The lower pricing was influenced by the disappointing stock-market performance of its competitor Lyft, according to The Wall Street Journal. Some investors said they were waiting for Lyft to report earnings on Tuesday before placing their orders for Uber’s IPO.

Lyft shares have tumbled 23% from their IPO price in March and 37% from where they first traded. The dismal performance comes after enthusiastic investor appetite for Lyft’s shares, according to Reuters.

Put another way, Lyft’s rapid decline in its first month of trading was the second-worst opening-month performance of a large US-listed IPO, according to Dealogic. Only Facebook’s 21% decline in 2012 was worse than Lyft’s 20.5% drop. 

Source: Market Insider

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