Uber suffers double digits lose in rocky IPO debut
Ride-hailing firm, Uber continues its downward trend on Monday after debuting it’s initial public offer (IPO) in the New York stock exchange market.
The San Francisco-based company dropped as much as 11% to $37.08 in New York after selling 180 million shares at $45 apiece on Thursday.
On Friday, the ride-hailing giant never traded above that price, ending the day down 7.6% at $41.57 even as other stocks gained.
Worse yet, CEO of Uber, Dara Khosrowshahi doesn’t expect the situation to get much better in the near term.
“Sentiment does not change overnight, and I expect some tough public market times over the coming months,” he stated in an email sent to staff.
The share slump reflects investor scepticism about the size of the ride-hailing market, Uber’s ability to execute on food and package delivery and its push into autonomous vehicles, said Ygal Arounian of Wedbush Securities.
The IPO also comes as investors shy away from riskier assets given US-China trade tensions, said the analyst, who has an outperform rating on Uber and sees the stock reaching $65 in the next year.
“Uber’s highly anticipated IPO coming out of the gates on Friday was clearly not a ‘storybook start’,” Arounian wrote in a note.
Uber is a “prove me situation and thus not going to be an overnight success story.”