Former Uber chief executive and co-founder Travis Kalanick left the company in disgrace last year and will now be selling one-third of the shares that he owns of Uber.
This will be the first time that Kalanick sells his own stocks. Kalanick still owns ten percent of the company.
The Rich Get Richer
Kalanick is already a billionaire, with the sale of his shares of Uber he stands to make an estimated $1.4 billion. He's reportedly selling his shares to SoftBank Group and a group of investors. Previously SoftBank along with other investors bought Uber shares at a discounted valuation of $48 billion at the end of last year.
Kalanick originally offered to sell as much as 50 percent of his shares but had to scale back the amount because of limits in the deal between the buyers and Uber.
Uber's valuation currently sits at $68.5 billion, the reason for the steep discount for the buyers stems from the recent issues that the company has been facing. In addition to the Kalanick sexual harassment allegations, government investigations into bribing officials in Asian countries and the use of software to dodge regulators, lawsuits regarding business practices, and problems with investors such as Benchmark and Alphabet.
Issues with Alphabet stem from a lawsuit regarding the theft of trade secrets, and Alphabet investing in the company's main competitor Lyft.
Japanese conglomerate SoftBank announced a deal with Uber last week. A consortium that includes SoftBank, TPG Capital, and Dragoneer Investment Group will purchase 17.5 percent of Uber and includes an investment of $1.25 billion.
A majority of the shares will go to SoftBank, which will now own 15 percent of Uber, with the rest of the consortium owning the rest of the shares in the purchase.
A restructuring of the board of directors is also part of the sale. Uber's board will go from 11 to 17 members. It will include four independent directors, will limit early shareholders' voting power, and will limit the control Kalanick has on the board. This may be one of the reasons why Kalanick is selling his shares despite sitting on the board of directors.
The investments come as other firms are divesting from Uber. Benchmark, a venture capital firm, announced that it would sell a portion of the 13 percent of shares it owns in Uber. Alphabet's GV venture capital firm offered to divest less than of its shares in Uber.