Uber Moves Backward In Its IPO

Uber CEO Dara Khosrowshahi IPO

The doubts were also strengthened by the way Lyft, Uber's competitor in the U.S., fared post listing. President Donald Trump had moved overnight to slap fresh tariffs on Chinese goods. While there will be plenty of investors willing to accept short-term losses for long-term gain, Uber and Lyft will have much more competition in the autonomous taxi market than it now has in the ride-share market, including companies like Tesla and Google. While the company briefly reclaimed nearly all its losses by early afternoon, the comeback proved short-lived.

Uber had originally suggested a price range of $44-$50 for its share price listing, valuing the company at up to $120bn.

Of course, the explanations are already coming thick and fast as to why this wasn't a disaster and why it was just bad luck on Uber's part, and how it will inevitably recover, and how the shares will at least give it $8bn to invest, and didn't Facebook have a hard time when it IPO'ed?

Uber entered a new era as a publicly listed firm on Friday, but shares fell in early trading to $42 (£32.20). A tense wait for those on the trading floor turned into a jittery start for the newly public company, which touched its intraday high and low prices within 35 minutes of opening. After submitting its confidential filing in December, Uber - along with Lyft Inc. and a host of other hopefuls - was left sitting on the sidelines while US stocks enjoyed the best start to a year in at least a decade. Lyft was down four percent, well below its IPO price.

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. The hope among underwriters is that by pricing the stock conservatively, shares will experience a solid first-day gain.

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But market experts have struggled to find value in a company that has consistently posted losses, and warned that it may never actually be profitable. "Uber has lost more money faster than any startup in history, with no clear path to profitability".

"The most important sort of statistic to look at is bookings, because that reflects essentially what people are paying for the service", he said. Morgan Stanley, Goldman Sachs Group Inc. and Bank of America Corp. led the listing.

Uber's stock was trading at about three per cent lower than its IPO price Friday afternoon. "Now we have to execute to make sure that the bet that they made on us is a great bet".

The company had been expecting a valuation as high as $120 billion as it prepared to go public, but in its most recent private funding round, investors had valued it at just $76 billion after posting a $3 billion loss a year ago.

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