Shares of ride hailing giant Uber Technologies Inc. (NYSE: UBER) fell further in pre-market trading Monday after a dismal initial public offering (IPO) last Friday.
The biggest IPO of 2019 proved to be a dud as shares of Uber dropped 5.8% to $39.11 U.S. at 7:51 a.m. in New York trading Monday morning before U.S. exchanges opened for the day. The San Francisco-based company sold 180 million shares at $45 U.S. 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.
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 the company’s stated push into autonomous vehicles. Uber also remain unprofitable despite rapid revenue growth. And, the IPO arrived as investors were shying away from riskier assets given U.S.-China trade tensions.
Another ride sharing company, Lyft Inc. (NASDAQ: LYFT), experienced a similar fate when it had its IPO earlier this year. Lyft’s share price is now down 29% since its March debut. Analysts say that Uber must execute flawlessly over the next 18 months to achieve a market value of $100 billion U.S. or more. The company had a $69.7-billion U.S. market capitalization at Friday’s close.
Asian stocks and European shares edged lower Monday as global markets await details of how China will retaliate against the U.S. after President Donald Trump moved to further hike tariffs on Chinese imports late last week.
