Sunday 22 September 2019

May 13, 2019: Uber shares go below US$40 on 2nd day of trading

May 13, 2019: The free-falling of Uber shares is extending on the second day of trading. Uber Technologies Inc. sure had a shaky debut after launching the largest initial public offering of the year. It is too bad that the CEO doesn’t expect the situation to improve in the near future. This is the most famous San Francisco-based ride-hailing giant company. It dropped as much as 11% to US$37.08 in New York. The company sold 180 million shares at US$45 each on Thursday. On Friday it never traded above that price. Friday ended down 7.6% at US$41.57. Other stocks gained. Of course, a lot of planning went into the trading and people’s feelings are not going to change overnight. Tough public market times will mean that investors will have to wait a long time to possibly receive a return. The IPO came as investors tried to stay away from riskier assets because of US – China trade tensions. There is a lot of skepticism out there about how much the stock price can rise, size of the ride-hailing market, Uber’s ability to perform food and package delivery and the effort into autonomous vehicles. Some investors do believe that the stock will reach something like US$65 in the next year.

The competitor ride-sharing company Lyft Inc. fell 29% since its March debut. This decrease shows no signs of ending Monday, with shares falling another 7.3% lower to hit new record lows. These results disappointed the market, but investors have hope.

Uber has to operate very correctly to make a market value possible such as US$100 billion. The company should successfully morph its ride-sharing platform into broader types of sales such as including food and freight delivery. Uber had a US$69.7 billion market value at Friday’s close. Investors are awaiting details about how China will retaliate to the US hiking tariffs. This is why Asian stocks and European shares are going lower.

You would think Uber and Lyft mostly use the usual car vehicles. But, on the streets of Los Angeles county, eleven scooter-and-bike-share companies are permitted to operate up to 36,170 vehicles. More ideas are being created such as delivery robots, flying drones, flying taxis and self-driving cars.

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