Uber gets hit again; shares below $40

Uber gets hit again; shares below $40

Uber gets hit again; shares below $40

Uber shares fell early Monday after the ride-hailing giant suffered through a brutal IPO on Friday, which saw the biggest first-day dollar loss in US IPO history.

Uber had chosen a price at the low end of its expected range of $44 to $50 in an effort to escape negative investor sentiment that has also affected rival Lyft, which went public in late March.

"We are not anxious the stock is turbulent today on its first day of pricing and we continue to believe on a sum of the parts valuation this stock is worth a $100 billion+ and we would be buyers here despite the choppy tech tape and general market worries", Ives says. The San Francisco-based company sold 180 million shares at $45 USA each on Thursday, and on Friday the stock never traded above that price, ending its first day of trading down 7.6% to $41.57 U.S. First, the timing of Uber's IPO coincided with a general "risk off" pivot amid Sino-American trade war concerns, she said. Lyft also cited Waymo and Apple among the companies that could undercut its position as the second largest ride-hailing service. Trading opened at $38 per share and by midday, Uber's stock was down roughly 20% to $36 a share.

Both face rising costs and regulation, with Uber warning in its prospectus for investors that it may never be in the black.

He noted that Monday was a tough day for the stock market overall, not just for the San Francisco-based ride-share company with visions of becoming the "Amazon of transportation". The social media company's shares plummeted the weeks after its IPO. Archrival Lyft gave up another 6% Monday and trades 45% below its post-IPO high.

"And look at how they have delivered since". "Our road will be the same".

"While it will take time for the stock to settle and Uber must execute flawlessly over the coming 12 to 18 months, we believe a $100 billion+ market cap is warranted", said Arounian, who has an "outperform" rating on the stock.

Mr Khosrowshahi acknowledged that there were versions of Uber's future in which the company does not prosper as hoped, but warned against being distracted by pessimistic voices in the market.

The IPO price of $45 was below the price at which shares were sold to private investors three years ago, and its market value is below $70bn, significantly less than the $100bn it had targeted until recently.

Jay Ritter, a University of Florida professor of finance specialising in IPOs, said it was highly unusual for a high-profile company like Uber to fall so quickly.

"Long term, we still see shared transportation as a market with a long runway for secular growth, potentially more rational industry competitive dynamics as maturity approaches & broader positive impacts on society", Eric Sheridan, an analyst at UBS, wrote in a note to clients. "I think we are looking at a duopoly in North America".

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