Media Moves

Coverage: Uber falls 8% in first day of trading

May 13, 2019

Posted by Chris Roush

Uber hit a few potholes on its first day of trading, closing down 8 percent on Friday and reflecting lingering doubts about its future prospects for profitability.

Cathy BussewitzMichael Liedtke and Tom Krisher of the Associated Press had the news:

The ride-hailing company injected investors with a dose of reality right out of the gate, trading at $42 a share Friday — or nearly 7% below its IPO price of $45 on an already volatile day for the markets. Its shares closed at $41.57.

Despite the rocky debut, Uber CEO Dara Khosrowshahi said he was thrilled to complete the IPO, adding that the $8.1 billion that Uber raised in the process would be crucial to its future growth plans.

“It’s a great moment for the company and all the employees who have been working so hard to get here,” Khosrowshahi said in an interview with The Associated Press. “It was a tough week to go public, but we got it done.”

Uber’s IPO price was lower than initially expected, and the caution may have been driven by escalating doubts about the ability of ride-hailing services to make money since Uber’s main rival, Lyft, went public six weeks ago.

Mark DeCambre of reported that the drop was the fifth-worst performance of an IPO in the past 24 years:

By at least one measure, the initial public offering was the fifth weakest one-day return of a company with a value of at least $10 billion of the past 24 years, according to data from Dealogic.

Uber’s stock finished Friday trade off 7.6% at $41.57, giving it a valuation of $69.71 billion, according to FactSet data, after pricing its shares the day before its official public debut at $45.

The first-day skid puts Uber’s return better than only four other companies sized at least $10 billion: ADT Inc. which raised about $1.5 billion on January of 2018 but booked a first-day slide of 11.5%; and U.S. listed shares of Chinese company IQIYI Inc. described as the Netflix Inc. of China — which saw its shares close off 13.6% in its debut.

Dan Primack of Axios reported that other events also affected Uber’s first day of trading:

Uber got hit by a confluence of negative events, some of which were outside of its control:

  • The Dow was already down more than 300 points before Uber’s first trade, due largely to President Trump’s imposition of higher tariffs on Chinese imports. Stocks recovered later on, but investor sentiment was lousy during the time when an IPO would typically pop.
  • Maybe Trump played the long revenge game on Uber, after it snubbed him just days into his presidency.
  • The world is a vampire. North Korea. Iran. Venezuela. Pick your geopolitical poison.
  • Uber went public at the end of the stock market’s worst-performing week of 2019.
  • Lyft already had investors running scared, having earlier in the week reported disappointing Q1 results and warning that 2019 would represent “peak losses.”
  • Ride-hail driver strikes on Wednesday didn’t seem to have much impact on car availability, but they did raise awareness and prompted tweets from several presidential candidates.


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