How Rich Will UBER Employees Be After IPO? This Prediction is Shocking

Business, Lifestyle, Technology
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With the wealth created through Uber’s upcoming IPO, current and former employees could actually purchase every single home for sale in San Francisco, Oakland and Berkeley in cash. That is the conclusion of a new report from Redfin, which describes itself as “the tech-powered real estate brokerage.”

The basis for Redfin’s prediction

Redfin’s calculation is based on an IPO price of $47 per share, the midpoint of the ridehailing company’s proposed price range of $44 to $50 per share. Based on the $47-per-share price, current and former employees hold approximately $3.32 billion worth of stock in the San Francisco-based company.

If all of the $3.32 billion of the total stock wealth were to go into the San Francisco Bay Area real estate market once the IPO lockup period ends, current and former Uber employees could hypothetically buy:

  • Every 1,612 homes for sale in San Francisco, Oakland and Berkeley combined for $2.9 billion.
  • Every 853 homes for sale in the city of San Francisco for $2.2 billion, and have $1.1 billion left over.
  • Every 1,272 homes for sale in the city of San Jose for $1.47 billion, and have nearly $1.9 billion left over.
  • Every 643 homes for sale in the city of Oakland for $510.1 million.
  • Every 116 homes for sale in the city of Berkeley for $165 million.
  • Virtually all the entire bottom half of homes for sale by list price—7,551 homes—across the Bay Area (the San JoseSan FranciscoOakland combined statistical area) for $3.32 billion.
  • And even the top 2% of homes for sale by list price—223 homes—in the entire Bay Area for $3.32 billion.

How does it compare to Lyft?

Lyft, the other major ridehailing business based in San Francisco, went public at the end of last month. At that time, Redfin calculated that current and former Lyft employees had their own significant windfall and they could have purchased every single home for sale in the city of San Francisco based on the company’s IPO price.

The greater San Francisco metro area, where the average home sold for $1.4 million in March, is easily the most expensive large housing market in the country, and San Jose, where the median home price is $1.1 million, is right behind it. The wealth coming down the pipeline from this year’s Bay Area tech IPOs could put further pressure on an area where housing is already unaffordable for many of its residents: Just 2.6 percent of homes in the San Francisco metro are affordable on the area’s median household income of $101,714.

“The Uber IPO, along with the other large tech companies going public this year, will have a large and lasting impact on Bay Area real estate,” said Redfin chief economist Daryl Fairweather. “Given the existing shortage of housing, competition among newly wealthy buyers will drive up prices. Less fortunate locals will move inland or out of state in search of affordable homes and lifestyles.”

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