Uber CEO Dara Khosrowshahi has blamed his company’s lackluster initial public offering (IPO) on U.S. trade tensions.
The ridesharing giant’s IPO was expected to be the biggest in tech history. Yet, even with Uber pricing its shares toward the bottom of its target range at $45, the stock ended its first day of trading down 7.6 percent at $41.57. Khosrowshahi believes the United States’ escalating trade tensions with China had a direct impact on the stock’s performance.
“The timing of our IPO was very much aligned with our president’s tariff wars, the same day,” said Khosrowshahi, according to Reuters. “So, I think we got caught up a bit in the market swirl, and there’s nothing you can do about that.”
Uber shares fell as low as $36.08, but made a rebound to trade at $42.21 on Tuesday (June 11), down 0.9 percent on the day.
Employees “have a six-month lockup, so nobody in the company cares anyway what the stock prices [are] now — it’s a bunch of traders,” said Khosrowshahi. “It doesn’t really affect us. … We work on building a great enterprise — the market will take care of itself.”
In addition, regulatory filings revealed that Khosrowshahi has the option to buy up to 750,000 of its shares, which can be exercised at $33.65 per share — well below the set IPO price. The ridesharing giant initially granted the options in September 2017, with a price of $41.65 per share. However, that was modified on May 8, 2018.
An Uber spokesman said the change was made to shorten the timeline (seven years, down from 10 years), “in conjunction with a bonus plan, dependent on the company being acquired for or trading at $120 billion.” Uber was valued at $82.4 billion when it went public.
“I believe in performance-based pay,” said Khosrowshahi when asked about his compensation. “If I do very well for shareholders, … that’s a circumstance where I want to be rewarded.”