Did Beyonce Make $300 Million Off The Uber IPO?

There's a very popular tweet floating around the web today that claims Beyoncé made $300 million off Uber's IPO. The story goes that at some point a few years ago, Beyoncé performed a private concert for Uber employees, and instead of taking $6 million in cash as payment, she requested $6 million in stock. That story is actually true. But is it true that those shares are worth $300 million today? Let's dig into it…

This whole fuss was kicked off from a tweet posted by a user named @KevinLeeJones1. The Tweet got over 121,000 likes and 34,000 retweets in just a few hours.

Related Article: Beyonce Net Worth 2019 is $500 Million

His Tweet was actually retweeting a Tweet from a website called ThatGrapeJuice.net, which is itself was referencing an article from InsideEdition.com, which is a rewrite of a Forbes article.

The Forbes article does indeed mention the story of Beyoncé taking $6 million worth of stock in exchange for a private 2015 performance. The source of Forbes' info is this article from the New York Times from the brilliant Mike Isaac, who recently published an amazing insider's account of Uber's history called "Super Pumped: The Battle for Uber," which is available on Amazon by following this link (highly recommend!).

In Mike's NYT article, he details how Beyoncé did indeed turn down a $6 million performance fee and instead requested to be paid in stock. Uber's then-CEO Travis Kalanick agreed. Amazing! She must be worth hundreds of millions more now, thanks to Uber's IPO on Friday, right???!!! Not exactly.

Kevin Winter/Getty Images

Here's what's extremely important to understand: Beyonce was given $6 million WORTH of restricted stock units (RSUs). She was NOT given 6 million shares.

I think this huge distinction is where the fake news insanity of this story has gotten out of control. If you didn't understand that Beyonce got $6 million WORTH of RSUs, as opposed to 6 million shares, you might have assumed that with 6 million shares at an IPO stock price of $45, Beyonce's stake would be worth $300 million ($270m at the IPO to be exact, and $234m at today's close).

What really happened is that Beyoncé got $6 million worth of shares at a time when the company was valued at $50 billion. Assuming she held on to all of those shares, at Uber's current market cap of $67 billion, her stake would be worth around $9 million. A very nice win, but certainly not as awesome as saying she made $300 million off Uber.

Two more quick caveats – The above math assumes her shares weren't diluted at all between 2015 and 2018. That's also probably not true. Uber had at least three other huge raises between 2015 and 2018. At each raise, her stake would be diluted somewhat. And secondly, if her shares are worth $9m today, that's before taxes.

Here's some more specific math courtesy of the Financial Times: In the summer of 2015, Uber raised $1 billion at a valuation of $50 billion. That translated to around $39.64 per share. Using that share price, it would be presumable that Beyonce got around 151,000 shares of Uber in 2015. Let's assume she still owns every share AND she never got diluted by future fundraising rounds (unlikely). Today Uber is trading at $43.21, so her 151,000 shares are worth $6,524,710 (before taxes).

So as much as I'd love to say that Beyoncé made $300 million off Uber's IPO, unfortunately, the rumor is false.

And btw. Had Beyoncé taken the $6 million cash and invested in a passive S&P ETF back in 2015, today she'd have $8.5 million. Had she bought $6m worth of Amazon, today she'd have $19.2 million 🙂

I also have not seen any evidence supporting the second part of @KevinLeeJones1's Tweet above about Beyoncé taking half the fee from Coachella so she had the film rights to sell to Netflix. It's been fairly well reported that Beyoncé earned the standard $4 million from Coachella, and Coachella simply had to agree to allow her to film in order to get her to perform. Beyoncé is powerful enough to get that deal without having to take a pay cut, and she has a three-film deal with Netflix that pays $20 million per film.

And while we're debunking rumors, can I please remind everyone that Kylie Jenner is NOT a billionaire.

Final note – A bunch of celebrities invested in Uber. Ashton Kutcher, Olivia Munn, and Jay-Z all made small investments early in Uber. Much earlier than Beyoncé. But even those investments are likely not worth enormous fortunes. To illustrate my point, it's known that Lance Armstrong was included in Uber's 2009 investment round when the company was worth just $3.7 million. If Lance held on to his stake to this day, after all the dozens of future investment dilutions, today his stake is worth $20-30 million at most. Jay-Z invested two years later when the company was worth $60 million… My point is, please be careful not to jump to conclusions when you hear stories about early investments.