Uber rings the opening bell on Wall Street to launch their IPO

11 May, 2019, 06:30 | Author: Frank Williams
  • Uber by the numbers

A market value of less than $75 billion is a considerable climb down from earlier projections: previous year, bankers jockeying to lead the offering told Uber it could be valued at as much as $120 billion in an IPO.

Like Lyft, Uber will face questions going forward over how and when it expects to become profitable after losing $3 billion from operations in 2018.

But it's relatively uncommon for US technology companies backed by venture capital, like Uber.

"It reflects maybe a little bit more investor caution", D.A. Davidson & Co analyst Tom White said of the Uber IPO. Investors have also been somewhat jittery about Uber, after its rival, Lyft, also had a lackluster IPO. Nevertheless, the offering values Uber at $82.4 billion - impressive, no doubt, but less than the $100 billion forecast Uber floated to investors this year and far below the $120 billion that some bankers anticipated last year. The San Francisco company already has lost about $9 billion since its inception and acknowledges it could still be years before it turns a profit.

Uber, the most high-profile United States listing since Facebook seven years ago, raised US$8.1 billion, pricing its IPO at US$45 per share, compared with an expected range of US$44-50 per share. But even if the stock market had been doing great today and Lyft's IPO hadn't been a low-level disaster, Uber would still kind of suck.

Despite all that, Uber's IPO is the biggest since Chinese e-commerce giant Alibaba Group debuted in 2014.

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Uber might be even more popular if not for a series of revelations about unsavory behavior that sullied its image and resulted in the ouster of its co-founder, Travis Kalanick, as CEO almost two years ago.

Uber has said it has the potential to grow not just in the cab hailing business, but also as a "superapp" to provide logistic services, such as grocery and food delivery, organizing freight transportation, and even financial services, much like Grab, its Southeast Asian counterpart.

The self-inflicted wounds included complaints about rampant internal sexual harassment, accusations that it stole self-driving vehicle technology, and a coverup of a computer break-in that stole personal information about its passengers. The stock, debuting on the New York Stock Exchange with the ticker symbol UBER, started out at around $42.50 apiece, and the market desperately willed it to reach $45.

Khosrowshahi told CNBC Friday morning that Lyft's stock performance had influenced Uber's choice to price its shares so conservatively.

Meanwhile, scores of Uber drivers say they have been mistreated by the company as they work long hours and wear out their cars picking up passengers as they struggle to make ends meet.

"It's going to keep bouncing around for months to come", Ortiz said.

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