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Uber Shareholder Group Wants Benchmark Off Board (axios.com) 31

Dan Primack, reporting for Axios: A group of Uber investors has asked that venture capital firm Benchmark step down from the company's board of directors, Axios has learned. It also wants Benchmark to divest enough shares so as to no longer have board appointment rights. The move comes one day after Benchmark sued former Uber CEO Travis Kalanick for fraud, in an attempt to have him removed from the board. From the letter: Mr. Kalanick's resignation, along with other concessions, on a few hours' notice and within weeks of a personal tragedy, under threat of public scandal. Even less so your escalation of this fratricidal course -- notwithstanding Mr. Kalanick's resignation -- through your recent lawsuit, which we fear will cost the company public goodwill, interfere with fundraising and impede the critical search for a new, world-class Chief Executive Officer. Benchmark has used false allegations from lawsuits like Waymo as a matter of fact and this and many actions has crossed the fiduciary line. Benchmark's investment of $27M is worth $8.4 billion today and you are suing the founder, the company and the employees who worked so hard to create such unprecedented value. We ask you to please consider the lives of these employees and allow them to continue to grow this company in peace and make it thrive. These actions do the opposite.

Uber Shareholder Group Wants Benchmark Off Board

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  • by Kohath ( 38547 ) on Friday August 11, 2017 @03:19PM (#54993117)

    Please keep us apprised of which investors want what management changes at all the non-public startup companies. News with this level of relevance really clears the mind in an almost zen-like way.

  • I was wondering what benchmark was coming off the board. Customer satisfaction? Driver satisfaction? How many days without a douchebag CEO?
  • Someone living somewhere that UK libel laws don't apply might think that this could be paraphrased as, "Stop! You're demanding the company is run properly! We'll lose all our money if the company has to obey the law and not have a toxic working environment!"

    Personally, living in the UK, I merely think that this is a cynical attempt to avoid the share price plummeting to its more natural level.

    • by slew ( 2918 )

      Someone living somewhere that UK libel laws don't apply might think that this could be paraphrased as, "Stop! You're demanding the company is run properly! We'll lose all our money if the company has to obey the law and not have a toxic working environment!"

      Personally, living in the UK, I merely think that this is a cynical attempt to avoid the share price plummeting to its more natural level.

      There is no "share" price. Uber is not a public company. Their unicorn valuation is simply the price/share that the last sucker paid in the latest financing round (and they paid a pretty good premium for the opportunity to invest). There is no secondary market for shares that you can stamp a market value for the share price. The valuation is all in the "opportunity" to accept your investment dollars into the moneysink that is Uber.

      This is simply a disagreement that is a matter of "contracts". I'm pret

      • by Cederic ( 9623 )

        There is no "share" price [...] the price/share that the last sucker paid

        You managed to contradict yourself in the first paragraph.

        To help you out a little: There are shares, the company has value, this means each share is worth a specific amount.

        We call that the share price.

        • by DRJlaw ( 946416 )

          There are shares, the company has value, this means each share is worth a specific amount.

          We call that the share price.

          The GP is more right than you. There are shares, the company has an unknown value, this means each share is worth an unknown amount and an unknown amount is not a price.

          During the last funding round there was a share price, but lots has occurred since then and all the changes in value since that point are merely guesses. Until there is another arms-length transaction, all you have are ind

          • by Cederic ( 9623 )

            There are shares, the company has an unknown value, this means each share is worth an unknown amount

            Where the flying fuck did I say that anybody knew the share price?

            an unknown amount is not a price

            I don't know how much a new Bugatti costs but it still has a fucking price.

            • by DRJlaw ( 946416 )

              I don't know how much a new Bugatti costs but it still has a fucking price.

              Whether you know it or not is irrelevant. There is a market for new Bugattis with sellers, buyers, and comparatively frequent transactions. The transactions establish the price.

              There is no market for Uber shares, selling and buying is restricted, and I'm willing to bet that you can't identify any recent transactions. Sellers don't know whaat a buyer will pay and buyers don't know what sellers will accept. It's all guesses. That

            • by slew ( 2918 )

              There are shares, the company has an unknown value, this means each share is worth an unknown amount

              Where the flying fuck did I say that anybody knew the share price?

              an unknown amount is not a price

              I don't know how much a new Bugatti costs but it still has a fucking price.

              If cannot buy the Bugatti (because of people who currently own Bugattis won't allow you to buy them because it dillutes their collector values), it doesn't have a price. Similarly, if nobody is contractually allowed to sell the Bugatti to you (or doesn't want to), it doesn't have price. This is what a illiquid investment is (compared to a product or a stock in a public market). For non-public companies, you don't get shares, you get restricted shares and you can't buy them unless the company wants you to

  • by BLToday ( 1777712 ) on Friday August 11, 2017 @03:56PM (#54993343)

    If you think they're causing problems and you feel their shares are worth $8.4 billion then pay them the $8.4 billion. Because by your logic Uber will be worth so much more once Benchmark is gone. I'm sure Benchmark will be very happy to dump their shares for $8.4 billion.

  • by Fencepost ( 107992 ) on Friday August 11, 2017 @05:00PM (#54993923) Journal
    "The suit revolves around the June 2016 decision to expand the size of Uber's board of voting directors from eight to 11, with Kalanick having the sole right to designate those seats. Kalanick would later name himself to one of those seats following his resignation, since his prior board seat was reserved for the company's CEO. The other two seats remain unfilled." and "Benchmark alleges that Kalanick pledged in writing -- as part of his resignation agreement -- that the two empty board seats would be independent and subject to approval by the entire board (something Benchmark says was the reason it didn't sue for fraud at the time). But, according to the complaint, Kalanick has not been willing to codify those changes via an amended voting agreement."

    Basically Kalanick PERSONALLY (not as Chairman, CEO or anything else) has the potential to control 3/11ths of the board, and if he can convince 3 more board members to go along then he can control the board even if the remaining 5 original board seats disagree. Benchmark regards this as way too risky considering all the other crap he's pulled in the past.
  • Benchmark can cut a sweet deal now cash out half at around $4B and lose its board seat. They can still gets some upside later if there is any or at least bank some safe profit now. SoftBank mentioned possible interest but they might want a board seat and better price since things kind of messy now , so there is merit to the damage control assertions though hard to quantify. Uber does need to get focused to preserve its astronomical valuation. Unless they come up with solid tech such as self driving patents

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