Uber shares slump as investor skepticism deepens after underwhelming IPO
Uber Technologies shares fell further on Monday after a rocky debut on Friday for the biggest initial public offering of the year.
The ride-hailing giant dropped as much as 11% to $37.17 in New York. The San Francisco-based company sold 180 million shares at $45 (U.S.) apiece on Thursday, and on Friday it never traded above that price, ending the day down 7.6% at $41.57 even as other stocks gained.
The share slump reflects investor skepticism about the size of the ride-hailing market, Uber’s ability to execute on food and package delivery and its push into autonomous vehicles, said Ygal Arounian of Wedbush Securities. The IPO also comes as investors shy away from riskier assets given U.S.-China trade tensions, said the analyst, who has an outperform rating on Uber and sees the stock reaching $65 in the next year.
“Uber’s highly anticipated IPO coming out of the gates on Friday was clearly not a ‘storybook start’,” Arounian wrote in a note. Uber is a “prove me situation and thus not going to be an overnight success story.”
Ride-sharing peer Lyft Inc. fell in sympathy with Uber on Friday, extending its losses to 29% since its March debut. That slide showed no sign of abating on Monday, with shares another 2.3% lower in early trading. Lyft had slumped as last week came to a close after its first set of results disappointed the market.