Rough road ahead as Uber’s disappointing IPO drags Lyft’s shares down

Uber‘s Initial Public Offering (IPO) debuted below expectation after shares opened for trading at $42 apiece on the New York Stock Exchange, after dragging the shares of its market rival, Lyft, down.

The San Francisco-based company’s share price took a dive just a day after the IPO, hitting $42 per share, down from the $45 per share it peaked on Thursday.

Note that Uber‘s pre-IPO share price was $75.5 billion, far below the $120 billion valuation that was floated in October 2018 by Wall Street banks. Now, the valuation has reduced even further to $69.7 billion, after the company’s share price dropped 6.7% from $45 down to $42 on its first trading day.

Related posts

Gulf of Guinea piracy dropped by 80% in 2021, $783 million lost to piracy – NIMASA

September 16, 2021

2,233 containers of cocoa bean exported from January to August, 2021

September 16, 2021

Rough road ahead: With Uber‘s shares price dipping after listing, there’s a possibility that the company may follow in the footstep of its rival, Lyft. While Lyft listed high on IPO day at $87.24, shares slid throughout the session on their opening day and closed down at $77.75.

Since its debut, Lyft‘s share has continued to decline on the public market, plunging to a record low this week; no thanks to Uber‘s IPO. On Friday, Lyft‘s share price was down as much as 8%.

Also, Uber‘s IPO comes at a time the US and China trade tension is pressuring the stock market, causing volatile market, which isn’t conducive for IPOs as it affects investor confidence. During an important phase for newly minted shares, the volatile market also creates an uncertain environment, Nairametrics learned.

But Uber isn’t worried: Uber‘s Chief Executive Officer, Dara Khosrowshahi, assured shareholders of rewarding years ahead, stating the listing day drop doesn’t reflect the success of the company.

“My reaction (to the share price) is if we build and build well, shareholders will be rewarded. We’re certainly not measuring our success over a day, it really is over the years.”

Uber made history: Despite recording a drop in its share price just a day after listing, the ride-hailing company joined the league of companies with the largest US debuts, falling behind Alibaba‘s $169 billion IPO in September 2014, and Facebook‘s $81 billion IPO in May 2012, according to a Dealogic analysis.

Before its listing on the New York Stock Exchange, Uber raised over $15 billion from investors to boost growth and expansion into food delivery and freight hauling. Uber reported a loss of $3.03 billion in 2018 from operations.