It's the end of an era for ridesharing giant Uber (UBER -0.20%), for better or for worse. The company announced this week that co-founder Travis Kalanick is stepping down from Uber's board of directors at the end of the year.
Kalanick was ousted by private investors as Uber CEO in 2017 over a series of controversies including creating a toxic workplace culture that turned a blind eye toward sexual harassment while directing the company to push legal boundaries in the pursuit of disruptive growth. Uber then tapped Expedia former CEO Dara Khosrowshahi to lead the company -- and take it public.
Image source: Uber.
Focusing on CloudKitchens
"Uber has been a part of my life for the past 10 years," Kalanick said in a statement. "At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits."
Khosrowshahi added:
Very few entrepreneurs have built something as profound as Travis Kalanick did with Uber. I'm enormously grateful for Travis' vision and tenacity while building Uber, and for his expertise as a board member. Everyone at Uber wishes him all the best.
Kalanick's newest start-up, CloudKitchens, allows restaurant entrepreneurs to rent out shared industrial kitchen space, making it an appealing capital-light alternative for delivery-only services or food trucks that are interested in expanding. Despite the company's name, CloudKitchens has nothing to do with cloud computing or high-flying tech. Think of it like WeWork but for kitchens and without the egregious self-dealing.
The start-up has secured $400 million in funding from Saudi Arabia's sovereign-wealth fund.
Dumping nearly 100 million shares in 2 months
Over the past two months, Kalanick has been steadily unloading all of his remaining Uber shares as part of a Rule 10b5-1 trading plan, which allows insiders to set up pre-arranged schedules to buy or sell stock without violating insider trading laws.
Shortly after underwhelming Uber's IPO in May, the co-founder had nearly 390,000 restricted stock units (RSUs) vest in connection with Uber going public (he handed over about 190,000 RSUs to cover the associated tax liability) and Kalanick exercised some options at the enviable strike price of $0.61 per share. After all that, Kalanick held nearly 100 million shares when including direct and indirect holdings: 75.4 million shares held directly and another 22.6 million shares held inside a charitable remainder unitrust (CRUT).
Data source: SEC filings. Chart by author.
That's an awful lot of shares to sell and using a Rule 10b5-1 trading plan helped spread out the transactions to minimize the market impact. Kalanick first sold off his CRUT's holdings, bringing in over $610 million in proceeds in early November. It's taken longer to dispose of the direct holdings, and as of Kalanick's most recent Form 4 filing (as of this writing) he had 5.8 million shares left as of Dec. 19 after pocketing $2 billion in proceeds. Uber confirmed that Kalanick will sell his remaining shares this week.
Uber has evolved quite a bit as Khosrowshahi has tried to overhaul the company's internal culture. The company recently set a timeline for when it expects to be profitable on an adjusted EBITDA basis.
