Day two, strike two, and more of the same for Uber.
Monday’s trading marked the second session of the ride-hailing giant’s tenure on the public markets following its initial public offering (IPO), and there was no respite to the selling.
Shares of the company finished the session down 10.7 percent, to $37.10.
Busted IPO, indeed, considering the Thursday pricing was $45, itself at the low end of the range that had been expected by Wall Street coming into the end of last week.
Granted, Monday was a terrible, no good, lousy day for the markets, and the swoon that sent broader indices down more than 2 percent on the day was tied to concerns over China, the U.S. and an escalating trade war — complete with tariffs — that is making all manner of goods increasingly expensive.
But the concerns surrounding Uber may be lingering, even if they are not tied to international trade. As noted in this space last week, the roadmap may be one that sees the company branch out beyond its core transportation business into logistics and food delivery. But in the meantime, red ink abounds on the bottom line.
The “buck up” message — if it was that — which appeared Monday (May 13) from CEO Dara Khosrowshahi did not buck anyone up.
As reported by Bloomberg, in an email to staff Monday, the CEO said that rough market days may be ahead, and that “today is another tough day in the market, and I expect the same as it relates to our stock. Sentiment does not change overnight, and I expect some tough public market times over the coming months.” To help rally some sentiment among staff, he said in the same missive that “Facebook and Amazon post-IPO trading was incredibly difficult for those companies. And look at how they have delivered since.”
As for Uber, which raised several billion dollars in last week’s debut, according to Krosrowshahi the firm has “all the capital we need to demonstrate a path to improved margins and profits.”
One group seems to have made out on the ride-hailing firm’s IPO. The Financial Times estimated the underwriters as a group — which included Morgan Stanley and Goldman Sachs — banked roughly $106 million in revenues on the offering.
The road continues to stretch ahead, perhaps anything but smooth.