Uber stock drops in rocky debut

Daniel Fowler
May 13, 2019

Its stock debuted at $38 per share in 2012, rose to $42 on its first day of trading and closed at $38.23.

Consider also that Uber's debut valuation of £58.8 billion was a considerable drop from the between £69.2 billion and £92.3 billion the company had been worth in some analysts estimation just a month earlier - one meant to stanch the forthcoming bleeding that had begun with competitor Lyft's bellyflop IPO.

The fall in shares undermined Uber's strategy of pricing its oversubscribed IPO conservatively at $45 a share to avoid a repeat of rival Lyft Inc's stock market struggles following a strong debut in March. Uber then hired Khosrowshahi to lead the company.

The Dow Jones Industrial Average fell almost 300 points in early trading, just hours after new US tariffs on Chinese imports took effect.

That sobering reality is one reason that Uber fell short of reaching the $120 billion market value that many observers believed its IPO might attain.

Uber has said that it has the potential to grow not just in the cab hailing business, but also as a "superapp" to provide a variety of logistic services, such as grocery and food delivery, organizing freight transportation, and even financial services, much like Grab, its Southeast Asian counterpart. The San Francisco-based company lost US$3.04 billion last year on an operating basis on revenue of US$11.3 billion, bringing total operating losses over the past three years to more than US$10 billion, according to filings. The IPO came in at the lower end of Uber's targeted price range of $44 to $50 per share. While Uber briefly clawed back nearly all its losses by early afternoon, the comeback ultimately proved to be short-lived.

SBI gets two non-binding bids for Jet Airways
Jet Airways aircrafts are seen parked at the Chhatrapati Shivaji Maharaj International Airport in Mumbai , India, April 18, 2019. The lenders are offering 31.2-75 per cent stake in the company on a fully diluted basis.

But it's relatively uncommon for US technology companies backed by venture capital, like Uber.

The CEO of Uber has two simple, straightforward tips for all Uber passengers: Be respectful, and don't slam the door. But even if the stock market had been doing great today and Lyft's IPO hadn't been a low-level disaster, Uber would still kind of suck.

Both Uber co-founders, Travis Kalanick and Garrett Camp, were present at the exchange for the opening but absent from the podium during the bell ringing.

Rajesh Raut, a former cook who became an Uber driver, said his earnings increased when Uber had first launched but have now become meagre, resulting in him defaulting on vehicle loans. Why would its stock market entrance be any different?

Uber is a decade-old ride-share mobile app that is live in 63 countries and over 700 cities. "It's an important thing to consider if you're an investor and you saw value in the company and its disruptive potential, nothing has really changed in the past 48 hours".

Other reports by

Discuss This Article