Rough ride for ride-sharing company Uber on first day of trade

Rough ride for ride-sharing company Uber on first day of trade

As a public company, Uber will have to deal with quarterly earnings reports and demands from shareholders to plot a path to profitability.

The company's stock trades on the New York Stock Exchange under the ticker "UBER". Uber had at one stage considered raising significantly more at a valuation of up to $120bn, but trimmed its target following a weak debut for its biggest rival, Lyft, last month.

The most highly anticipated Silicon Valley technology float since Facebook stuttered yesterday on Wall Street as shares in Uber fell on their debut.

"Our company is not a fair-weather company", Khosrowshahi said. Only about a fifth of IPOs have ended their first day of trading in the red in the last two years, according to Dealogic data. Kalanick avoided the press while there, but some investors have speculated that he could try to stage a comeback at some point as he still feels scorned at being forced out of the company that he helped build. Kalanick owns 8.6% of Uber, making him a billionaire many times over now that Uber shares are freely traded.

"Similar to Lyft, we see a hard path to profitability for Uber as well, but think Uber's larger global network will help and we note we see an easier road for Uber Eats and Freight, which may help offset some of the challenges." .

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Uber's losses just a year ago totalled US$3.04 billion on an operating basis, with revenue of US$11.3 billion.

The much-awaited Uber Technologies shares stumbled on its debut on Friday with the share price opening below the IPO price level set by the company. But even with Uber's lower share price, its valuation of $76 billion is four times more than Lyft's.

Uber closed at US$41.57, giving it a market capitalisation of just US$69.7 billion on its first day of trading. Uber CEO Dara Khosrowshahi says Uber is going to transcend its current operations as a ride-share app and expand to other services. As of Friday's closing price, his stake in Uber will be worth $4.9 billion.

SharesPost principal analyst Alejandro Ortiz said the timing for Uber to start trading was bad given the uncertainty over the trade spat with China. Hundreds, if not thousands, of other Uber employees are expected to become millionaires in the IPO. "It's an important thing to consider if you're an investor and you saw value in the company and its disruptive potential, nothing has really changed in the past 48 hours".

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