Uber Stock Drop nearly 8% below IPO price

 

Uber’s shares sank almost 8 per cent below their offer price on Friday, giving the ride-hailing company a disappointing market value of below $70bn — way below the $100bn valuation it had until recently hoped to achieve. The stock closed at $41.57, compared with an IPO price of $45 a share. The drop ranked as the eighth worst first-day share price performances for a US-listed IPO raising more than $1bn, according to Dealogic.

It took more than two hours for the stock to finally start trading after Uber executives and drivers congregated at the New York Stock Exchange for the bell-ringing ceremony.

Uber closed at $41.57, giving it a market capitalization of just $69.7 billion. The San Francisco-based company last raised private capital from Toyota Motor Corp. in August at a valuation of about $76 billion.

Dara Khosrowshahi, Uber’s chief executive officer, said in an interview on the floor of the exchange Friday that trade tensions between the U.S. and China played a role in the stock’s weak performance. President Donald Trump had moved overnight to slap fresh tariffs on Chinese goods. “You can’t pick when you go public,” Khosrowshahi said. He added: “What’s important is that we got our deal done. We raised over $8bn in primary capital, which is going to be an important engine to grow.”

Officials at Citadel Securities, the designated market maker, said sentiment had probably been hampered by the broader sell-off in US equities. The S&P 500 index and Dow Jones Industrial Average traded in negative territory most of the day on global trade concerns. However, Uber and Lyft continued to slide even as the main US indices reversed course in the late afternoon. Lyft shares fell 7.4 per cent to $51.09 — compared with an IPO price of $72.

Along with Uber, they’ll be following companies like rival Lyft Inc., Pinterest Inc. and Beyond Meat Inc. to market. Those three offerings provide a few clues for how public market investors are going to treat unprofitable startups with huge private valuations.

Beyond Meat ended the week 165% over its IPO price with a valuation of $4 billion. Pinterest extended gains to close 53% above its listing price of $19 a share. Lyft, meanwhile, followed its bigger rival down Friday, almost $21 below where it sold the stock just six weeks ago.

Uber’s shares sank almost 8 per cent below their offer price on Friday, giving the ride-hailing company a disappointing market value of below $70bn — way below the $100bn valuation it had until recently hoped to achieve. The stock closed at $41.57, compared with an IPO price of $45 a share. The drop ranked as the eighth worst first-day share price performances for a US-listed IPO raising more than $1bn, according to Dealogic.

It took more than two hours for the stock to finally start trading after Uber executives and drivers congregated at the New York Stock Exchange for the bell-ringing ceremony.

Uber closed at $41.57, giving it a market capitalization of just $69.7 billion. The San Francisco-based company last raised private capital from Toyota Motor Corp. in August at a valuation of about $76 billion.

Dara Khosrowshahi, Uber’s chief executive officer, said in an interview on the floor of the exchange Friday that trade tensions between the U.S. and China played a role in the stock’s weak performance. President Donald Trump had moved overnight to slap fresh tariffs on Chinese goods. “You can’t pick when you go public,” Khosrowshahi said. He added: “What’s important is that we got our deal done. We raised over $8bn in primary capital, which is going to be an important engine to grow.”

Officials at Citadel Securities, the designated market maker, said sentiment had probably been hampered by the broader sell-off in US equities. The S&P 500 index and Dow Jones Industrial Average traded in negative territory most of the day on global trade concerns. However, Uber and Lyft continued to slide even as the main US indices reversed course in the late afternoon. Lyft shares fell 7.4 per cent to $51.09 — compared with an IPO price of $72.

Along with Uber, they’ll be following companies like rival Lyft Inc., Pinterest Inc. and Beyond Meat Inc. to market. Those three offerings provide a few clues for how public market investors are going to treat unprofitable startups with huge private valuations.

Beyond Meat ended the week 165% over its IPO price with a valuation of $4 billion. Pinterest extended gains to close 53% above its listing price of $19 a share. Lyft, meanwhile, followed its bigger rival down Friday, almost $21 below where it sold the stock just six weeks ago.