Uber’s Stock Has a Tough Day on its Debut

Now that it's gone public, the pressure is on Lyft to deliver positive results to shareholders through revenue-generating schemes that take on rivals like Uber, which itself started trading on the stock market just last week. One of the leading practitioners globally of this trend is Uber. Court challenges and new regulations could force Uber to recognize its drivers as company employees rather than independent contractors and its drivers could, increasing costs.

"You can't pick when you go public", Khosrowshahi said. And the business arguably has no moat around it - capital is simply being invested to drive quarterly market share in the ride-hailing battle with the smaller Lyft. And in the past six weeks, they raised an additional $10.4 billion in their recently completed initial public offerings of stock.

While it's hardly unique for a young technology company to lose money while chasing growth, analysts have still pointed to Lyft's uncertain path to profitability as a reason for caution.

Many institutional firms already had exposure to Uber prior to the IPO and "some of those that did obtain allocation were quick to flip them", she said.

The poor opening had some observers asking whether the markets may be past the peak of enthusiasm for loss-making stocks that can not count on locking in consumers.

A Ride-Hailing Or Unicorn Problem?

"Uber" clearly learned from its'little brother' Lyft, along with the expertise it's gone through", Wedbush Securities analysts Ygal Arounian and also Daniel Ives composed late Thursday.

And shares of Google owner Alphabet, which owns a 5% stake in Uber, were down 3% on Monday.

Uber's road to IPO was marred by several hurdles including increased regulation in several countries and fights with its drivers over wages.

In the first hour of the ride-sharing company's IPO, retail investors at TD Ameritrade executed 1.8-times more trades than in Lyft's first 2.5 hours, according to TD Ameritrade's Alyson Nikulicz.

But most experts believe it will still be many more years before self-driving vehicle technology reaches the point that it can support a large fleet of robotaxis. "The story today is development, but growth is expensive".

Investors would be wise to look carefully at what's under the hood - and who's behind the wheel - before they hitch a ride with either company. This fall gave the company a market capitalization of around $76.5 billion, significantly less than the $120 billion figure spruiked by some company insiders previous year prior to the company's initial public offering. That program hasn't been well received on Wall Street so far.

Uber shares went into a fresh skid Monday, May 13, 2019 after steep declines in last week's hotly anticipated market debut for the global ride-hailing giant.

Markets with only one or two dominant players often create situations for companies to abuse their power or attempt to stifle competition. Unlike recent mega-IPOs by companies such as Facebook, Inc.

  • Zachary Reyes