Uber is suffering a bad first day as a public company as its shares slid into negative territory in the initial moments of trading.
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. Initial reports suggest that the Uber's bankers, Morgan Stanley and Goldman Sachs, had misjudged the demand. It's listed on the New York Stock Exchange under the ticker symbol "UBER".
"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. Retail investors at TD Ameritrade executed more trades in the first ten minutes of Uber's debut than in Lyft's first 2-1/2 hours.
That's highly unusual, especially for a high-profile tech company.
Japan's SoftBank Group Corp, for example, invested in Uber in early 2018 at US$48.77 per share. The trading debut will be closely watched by the cavalcade of other tech startups that are expected to go public this year, including Slack Technologies Inc., Postmates Inc., Peloton Interactive Inc. and WeWork Cos.
Since it began operating in 2009, Uber has expanded and diversified its transportation services with offerings like its Uber Eats food delivery and Uber Freights for shipping and its acquisition of Dubai-based company Careem, which offers similar services in the Middle East, North Africa and Pakistan.
Beyond Meat ended the week 165% over its IPO price with a valuation of $4 billion. The hope among underwriters is that by pricing the stock conservatively, shares will experience a solid first-day gain. But that company has had a rough ride since, falling nearly 30 per cent since it debuted.
Mostafa Maklad, an Uber driver, told TechCrunch, "Uber, year after year, keeps cutting the rate and how much money they pay drivers..."
In distributing the stock, Uber prioritized shareholders - particularly institutional investors - that it thinks will hold on to the shares for a long time, according to a person familiar with the matter. Its total operating losses over the past three years were more than $10 billion, according to filings. Unlike Uber, which priced its IPO at the lower end of its $44-$50 per share range, Lyft had set its price at the higher end of the range. Even at the tamped-down price, Uber now has a market value of $82 billion - five times more than Lyft's.
"The most important sort of statistic to look at is bookings, because that reflects essentially what people are paying for the service", he said.