The biggest initial public offering (IPO) of the year happens today as ride hailing company Uber (NYSE:UBER) lists its shares on the New York Stock Exchange, albeit with lowered expectations.
The world's leading ride-hailing service has its IPO on Friday and has priced its offering at $45 U.S. per share – the lower end of its targeted range of $44 to $50 U.S. per share — a decision that may have been driven by the escalating doubts about the ability of ride-hailing services to make money since Uber's main rival Lyft went public six weeks ago and saw its stock price quickly drop by 20%.
Even at the lower price, Uber now has a market value of $82.4 billion U.S. — more than century-old automakers General Motors and Ford Motor Company.
No matter how the stock performs, the IPO is one of the most anticipated in years and a bellwether for the ride-hailing industry that has changed the way millions of people get around and been a boon for the so called "gig economy."
The IPO will raise $8.1 billion U.S. for Uber as it tries to fend off rival Lyft in the U.S. and help cover the cost of giving rides to passengers at unprofitable prices. The San Francisco-based company already has lost about $9 billion since its inception and acknowledges it could still be years before it finally turns a profit.
Despite concerns around profitability, Uber's IPO is the biggest since Chinese e-commerce giant Alibaba Group debuted with a value of $167.6 billion U.S. in 2014. Now the question is will investors take a chance on Uber’s stock despite the company’s lack of profits?
