Former Uber CEO Travis Kalanick, who was forced out six weeks ago, is reported to be trying to generate shareholder support to take back control of the company, which was once worth $62 billion.
“The Information” reported that Uber’s CEO Travis Kalanick, who was dumped after a 47-point report by former Obama Attorney General Eric Holder found the company to be a management disaster, has been calling to rally support from shareholders for a potential proxy fight.
Although Kalanick has not launched a shareholder battle yet, he may be preparing to head off discussions of a potential majority-control sale by existing venture investors to Softbank for a reported $45 billion. That would represent a spectacular $17.5 billion haircut to the $62.5 billion the company received earlier this year.
Despite never making a profit in its eight-year life and currently running at about a $3 billion annual loss rate, a big part of the value-creation at Uber had been due to faith in Kalanick’s hard-charging entrepreneurial style.
But that faith was questioned when former Uber computer science engineer Susan Fowler wrote her devastating February blog post in Medium titled: “Reflecting On One Very, Very Strange Year At Uber.” Ms. Fowler claimed that after reporting to Uber Human Resources that her manager was openly asking to have sex, HR protected the male manager as a “high achiever,” and then suggested she deal with it or transfer to another Uber unit.
The firestorm forced Uber to hire outside investigators and to set up a confidential hotline for female employees to lodge complaints. The effort generated 215 incident reports, which included issues regarding sexual harassment, bullying, bias, and retaliation. By June 6, Uber investigation forced 20 terminations, 31 employees required to take sensitivity training or counseling, 7 written warnings, 100 cases with no action taken, and 57 cases that were still being researched.
Uber’s Board of Directors held a special board meeting on Sunday, June 11 with Holder’s law firm, Covington & Burling LLP, to receive a scathing report regarding accusations that Uber senior executives ignored or encouraged inappropriate activities and sexual harassment.
Breitbart News noted that Holder’s investigation “was the Death Star” that caused Uber’s Chief Operating Officer, Chief Financial Officer, Chief Business Officer, Chief Marketing Officer, Head of Engineering, and General Counsel to leave involuntarily. Nine days later, with the scandal mushrooming, Kalanick was forced to resign.
Eric Holder then announced he planned to lead the legal “Resistance Movement” to President Donald Trump’s agenda, and that he is exploring a run against the President in 2020. Holder told Yahoo News: “There’s a justified perception that I’m close to President Obama. So, I want to use whatever skills I have, whatever notoriety I have, to be effective in opposing things that are, at the end of the day, just bad for the country.”
Rumors have been swirling that Uber’s board has failed in trying to hire a high-profile CEO, including Hewlett Packard Enterprises CEO Meg Whitman. A major stumbling block seems to be that Uber employees circulated a petition that showed overwhelmingly support to bring back Kalanick, according to the Recode blog.
Breitbart News published an article just two days after Uber’s CEO resigned, titled: “Kalanick Could Come Back to Uber, Like Apple’s Steve Jobs.” The article noted similarities to the Apple board’s highly-visible dumping of Steve Jobs in 1985.
Jobs’s replacement, John Sculley, raised prices to book higher short-term profits. But Apple almost went bankrupt and the board was forced to buy Jobs’ NeXT Computer 1997 to bring him back as CEO. Apple is now Forbes’ most valuable brand, and its $808 billion market capitalization makes it the most valuable public company in history.