As Uber IPO Date Approaches, Firm's Value Tops $50 Billion

Uber Technologies Inc. has reportedly completed a new round of funding that values the firm at more than $50 billion.

The additional funding means another delay for the Uber IPO date. No plans for an initial public offering have been announced, but an Uber IPO could come as soon as 2016 for the ride-sharing firm.

According to The Wall Street Journal, Uber raised roughly $1 billion in this latest funding round. That makes it the highest-valued startup in the world. It also ties Facebook Inc.'s (Nasdaq: FB) record as highest valued startup pre-IPO.

Uber IPOThe Journal reports the latest round of funding will help Uber strengthen its technology and help with global expansion. Microsoft Corp. (Nasdaq: MSFT) and the Indian Media company Bennett Coleman & Co. are said to be investors.

Uber has grown at a tremendous rate. In May 2014, the San Francisco-based company was valued at $18 billion. Its value topped $40 billion by December 2014. In the first quarter of 2015, business spending on Uber accounted for 46% of the entire transportation market. That's more than three times higher than Uber's Q1 2014 share of 15%.

Uber officials said they had more than $400 million in revenue in 2014 and expect that number to climb to $2 billion for the full-year 2015.

If Uber comes to market with a $50 billion valuation, it will already be bigger than Twitter Inc. (NYSE: TWTR), Yahoo! Inc. (Nasdaq: YHOO), and CBS Corp. (NYSE: CBS).

The massive valuation sets up the Uber IPO to be the most hyped public offering since the Alibaba Group Holding Ltd. (NYSE: BABA) deal of September 2014.

While there is no timetable set for the Uber IPO, there is a way to prepare yourself for this initial public offering. With this one simple strategy, you can start profiting today, months before the Uber IPO...

How to Profit from the Uber IPO Before the Date

If you want to invest in the Uber IPO, one of the best ways is with an IPO ETF like the First Trust IPOX-100 Index Fund ETF (NYSE Arca: FPX) and Renaissance IPO ETF (NYSE Arca: IPO).

IPO stocks can be extremely volatile, with new investors rushing into the stock on the first few days of trading.

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Investors see companies that post triple-digit gains on their first day of trading and figure if they jump in right when the stock goes public, they'll still capture most of those profits.

However, when a stock opens up 100% higher than the initial set share price, that's where the retail investor is buying in. Those who just bought in are missing out on the 100% gains the wealthy IPO investor already banked.

Now, if the stock pares its gains and finishes its first trading day up 50%, the retail investor has then lost 50% of the original investment.

IPO ETFs mitigate that risk.

FPX, created in 2006, aims to avoid the early share price rise and fall that can trap some investors. It aims to correspond to the performance of the IPOX-100 U.S. Index, which measures the performance of the top 100 companies ranked by market cap in the IPOX Global Composite Index. The global index only includes a stock after it has been trading for at least seven days and removes a stock on its 1,000th day of trading.

According to the Renaissance fund, it holds only the largest and most liquid newly listed U.S. IPOs. Stocks are only added to the portfolio after they have traded for at least five days and are removed after two years.

Granted, one-day triple-digit gains are rare with these ETFs, but so too are major losses.

Uber stock will likely be added to each of these ETFs once it begins trading.

In 2015, FPX has climbed 11.4%, while IPO is up 5.2%. The Dow Jones Industrial Average has slipped 1.3% in that time.

The Bottom Line: The Uber IPO will be one of the biggest financial stories of the year when the company comes to market. With a valuation of $50 billion, it is the highest-valued startup in the world and has tied Facebook as the largest startup pre-IPO. If you want to invest in the Uber IPO, one of the best ways is with an IPO ETF. They offer a play on the entire IPO market while mitigating some of the stock's initial volatility.

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