A person holds a mobile phone with the Uber app showing on it.Ryan Remiorz / The Canadian Press It was to usher in nothing less than a new era for Wall Street: UFAANG.’ That ungainly acronym meant to put ride-hailing company Uber in the same league as the titans of tech: Facebook, Amazon, Apple, Netflix and Google. But by Friday’s closing bell, the most talked-about start-up of the decade and the biggest initial public offering (IPO) of the year qualified for a different club—of losers. Done in by a broad stock market selloff and a weak earnings report posted by its primary rival, Uber plunged immediately at the opening of trading May 10, falling as much as 8.8 per cent from its IPO price of US$45 per share, a level that was already at the low end of bankers’ expectations. The stock closed at US$41.57, and Uber joined a small group of major IPOs that ended their first day down. Day One doesn’t necessarily determine the fate of a stock, of course. But Uber’s rough opening startled investors counting on a more jubilant debut from Silicon Valley’s quintessential unicorn. Many venture capitalists who had piled into the company were saddled with losses as the market capitalization shrank to US$69.7 billion. It all cast a pall on 2019’s prospects as the hottest year for tech listings this decade—and potentially on the future of the ride-hailing industry. Lyft Inc. followed its bigger competitor to end Friday down 7.5 per cent, almost US$21 below where it sold the stock just six weeks ago. Uber could certainly still join the celebrated group of popular tech stocks, even with a tough ride out of the gate. Dara Khosrowshahi, Uber’s chief executive officer, said in an interview on the floor of the New York Stock Exchange that trade tensions between the U.S. and China played a role in the weak performance. President Donald Trump had moved overnight to slap fresh tariffs on Chinese goods. “You can’t pick when you go public,” Khosrowshahi said. Still, Uber shares extended losses into Monday, sinking below US$38 per share, even as U.S. equities stabilized on renewed optimism that an all-out trade war can be averted. Khosrowshahi said in the interview that while profitability was a priority for the company, public market investors should be judging Uber by a different measure once it starts reporting quarterly earnings. “The most important sort of statistic to look at is bookings, because that reflects essentially what people are paying for the service,” he said. Uber sold 180 million shares for US$45 each Thursday, after marketing them for US$44 to US$50 apiece. Even at the low end of the price range, Uber’s listing was the ninth-largest U.S. IPO of all time and the biggest on a U.S. exchange since Alibaba Group Holding Ltd.’s US$25 billion global record-holder in 2014, according to data compiled by Bloomberg. A market value of less than US$70 billion is a considerable climb down from earlier projections: Last year, bankers jockeying to lead the offering told Uber it could be valued at as much as US$120 billion in an IPO. The San Francisco-based company last raised private capital from Toyota in August at a valuation of about US$76
Origin: Uber shares steadily falling, marking the company another Wall Street flop