If Uber is like the other unicorn companies, the investors that gave it the massive valuation have shareholder agreements that allow them to get paid before everyone else does. Anyone with common shares (e.g. employees, etc.) would get virtually nothing.

Would suck big time but also be entirely predictable for employees with options/golden-handcuffs who end up with nothing.

And if there have been multiple rounds at multiple valuations, then multiple agreements and/or complex negotiations. It seems logical that the principle is that the outside world just isn't going to know the ratio of optimism to desperation in a high valuation - since saying "You're buy at a high valuation" is equally saying you "get the money for a low valuation first".

The investors don't control the company. Only the board does. Sometimes that includes investors but it definitely doesn't control all of them. The board is required to do what's best for ALL shareholders, even if that means lower returns for some of them.

Uber raised $9B (1). Presumably this is all preferred stock or convertible debt, which is paid out 100% in an acquisition. That means investors only lose money and if Uber is acquired for under $9B. Over $9B, then investors and common shareholders splits the proceeds according to their ownership (2).

I'm simplifying as the liquidation preference matters based on the different valuations that investors paid.

For example, if Uber is acquired for $30B, then all the investors who paid above that valuation, would get their money back first. Then remaining investors and common shareholders would get their % split of the remaining pool of capital.

1) https://www.crunchbase.com/organization/uber#/entity

2)Usually this is how it works, but sometimes the terms vary.

Further, Google Ventures invested hundreds of millions of dollars early on in Uber's life -- The eventual sale price would be discounted by their percentage ownership. E.G. if Google owns 10% of private Uber, and they offer $10 Billion for the company, their net would be $9 billion.

I think it would be a merger of equals type structure so the valuation stays academic vs. a buyout. You are correct but just to add a bit more about the board, they are pretty much the largest investors. If you look at CrunchBase other than the black female they tacked on in late 2016, it's mostly VCs, PE, and Saudis SW fund on the board. Kalanick had "controlling" shares and provisions but ultimately either through the board or indirectly, if you're not profitable (or not profitable enough) large shareholders control your fate, even if on paper they dont

Uber would totally be worth 70 Billion as an Alphabet subsidiary, but there's no way Alphabet would acquire it for that price. Put Susan Wocjicki in charge of Uber, and have her pull a Stephen Elop routine to drive down Uber's valuation to something Alphabet can afford. Then just rebrand the whole thing as Waymo.

...they would have to fold under the Uber brand. Alphabet/Google automatically gives it credibility.

Uber shareholders may find pennies on the dollar to be preferable to bankruptcy.

Let them be sued into bankruptcy and then pick up the pieces afterward?