D-Day For Uber
It’s out of the trenches and into a haze of bullets as Uber gears up to go public today amid a tough global market and the ashes of Lyft’s torched IPO. This could be a biggie!
The long-awaited Initial Public Offering that has been on every investors’ mind since it was announced is finally here, priced at a surprisingly conservative $82bn. The company will list at $45 per share, towards the bottom of its $44-$50 range with the intention of raising $8.1bn. But what’s got them so spooked?
Lyft. That’s what. The uncontrollable hype surrounding the Lyft IPO resulted in one of the most spectacular IPO fails in recent years, with the stock plummeting Almost 30% in just over a month. Ouch.
Lyft aside, Uber is landing itself in a proverbial economic war zone as the trade war between the US and China escalates and global stocks experience their worst week in months. The conservative valuation, that sits almost a third lower than some analysts predicted a year ago, is an attempt to avoid a Lyft-style fire sale…But that may be beyond its control.
Investors still have to grapple with the fact that the company is still losing money hand over fist. Buying into a company that’s losing money is a dangerous business. The stock’s future success will ultimately depend on the business’ ability to sustain its growth while gradually moving towards profitability – no small task for a Uber-sized company.
Heads up: Uber will be added to the Invstr list very shortly, but if you’re keen to dip your toes into the IPO world #ripo could be just the ETF you’re after!
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