Uber Stock Slides in Disappointing Trading Debut That Followed Muted IPO - The New York Times

Uber tumbled below its initial public offering price on Friday, a disappointing start for one of the most hotly anticipated debuts in years and one that’s sure to raise concerns for other money-losing start-ups poised to list their shares.

The ride-hailing firm’s shares opened at $42, almost 7 percent below the I.P.O. price of $45. Uber’s I.P.O. valuation of $82.4 billion makes the company one of the most valuable to go public in the United States, but was less lofty than had been anticipated before it began pitching its shares to investors.

Uber’s Share price

Change From I.P.O. Price

Major Shareholders		Share value
	SoftBank Vision Fund Japanese investment fund	0
	Benchmark Capital Venture capital firm	0
	Travis Kalanick Co-founder and former C.E.O.	0
	Garrett Camp Co-founder	0
	Saudi Arabia Public Investment Fund Sovereign wealth fund	0
	GV Venture capital arm of Alphabet	0
	Ryan Graves First C.E.O.	0
	Dara Khosrowshahi Current C.E.O.	0

Data delayed by at least 15 minutes. Note: Value of some stakes reflect stock sales at the time of I.P.O., based on offering price, in addition to current holdings.

Uber is the biggest company to emerge from an age of smartphone apps, which began just over a decade ago after Apple introduced the iPhone in 2007. While other companies have adapted their businesses to mobile devices, Uber was a mobile native from the start, letting people hail rides with the touch of a button on their smartphones.

Along the way, Uber changed how people move around, allowing millions of people with no taxi licenses to become drivers without taking them on as full-time employees, an arrangement known as “gig work” that has led to labor protests and lawsuits.

But the ride-hailing service’s road to the public market has been rocky. Last year, investment bankers said that Uber could be valued at $120 billion upon I.P.O., which would have made it the biggest American company ever to go public on an American stock exchange. But that number has declined in recent weeks amid questions of whether Uber can make money, and stock market gyrations, which have dented the company’s market debut.

That caution extended into the start of trading Friday, which may have reflected investors experience with rival Lyft. Lyft rose in its debut but has since fallen well below its I.P.O. price.

Uber’s debut also capped a volatile week for the markets. On Friday, the S&P 500 index was on track for its fifth consecutive daily decline and its worst weekly performance of the year amid worsening trade tensions between the United States and China.

Uber Is Going Public: How Today’s Tech I.P.O.s Differ From the Dot-Com Boom

Uber, Lyft and others going public this year are more established than their tech counterparts from the late 90s, but as some see slowing growth, there are questions about where they go from here.

Founded by Garrett Camp and Travis Kalanick in 2009, Uber began as a high-end black car service for the Silicon Valley elite. The app seized upon the introduction of the iPhone, which had an accelerometer, an electronic instrument used to measure changes in velocity, and later a global positioning system, which Uber used to help both drivers and riders navigate the world around them.

The app, first called UberCab, was born of Mr. Camp’s frustration at San Francisco’s lackluster transportation options and an unreliable taxi industry. After some urging, Mr. Camp tapped Mr. Kalanick to lead the company as chief executive.

Soon, UberCab became Uber and grew rapidly across the United States. Growth truly exploded when the company introduced UberX, a low-cost option that hooked customers with bargain fares and a near-ubiquitous service that spread quickly across the world.

By 2014, Mr. Kalanick’s company had moved from noun to verb. To “Uber” somewhere meant to catch a ride, even as competitors with identical offerings popped up across multiple continents. Mr. Kalanick, known for his competitive spirit and no-holds-barred approach to capitalism, raised billions in venture capital, building a war chest to battle his rivals with subsidized, artificially lowered ride fares. By 2016, Uber’s valuation had soared well north of $60 billion.

[Meet the semiretired millennials who left California for low-tax, low-stress places like Texas, as their former start-ups stampede toward the stock market.]

The company ran into trouble in 2017. After years of cutthroat business tactics and a raucous culture rife with partying, harassment and other illicit behaviors, Uber’s reputation caught up to it. Mr. Kalanick was beset by multiple personal scandals, culminating in his eventual ouster.

Since then, his successor, Dara Khosrowshahi, a former chief of the online travel marketplace Expedia, has made it his goal to clean up the troubled company. His motto has been to always “do the right thing. Period.”

Who’s Getting Rich When Uber, Slack and Other ‘Unicorns’ Go Public

Highly valued tech start-ups are going public this year, and their debuts promise to generate big paydays for employees and investors. Here are what some of their stakes are worth at their I.P.O.s.

Mr. Khosrowshahi’s task is difficult. Though the company has spent millions to improve its brand, Uber’s reputation remains tarnished for some users. It must also improve its relationship with drivers, some of whom went on strike around the world on Wednesday to protest what they claimed were Uber’s unfair business practices.

[Here’s one man who has drive for Uber since 2012. He makes about $40,000 a year.]

And then there are the losses. Uber burned through nearly $2 billion in 2018 and does not expect to become profitable in the near future as it spends on ride-hailing and to expand into new businesses, such as Uber Eats, its food delivery service, and its autonomous vehicle development.

Mr. Khosrowshahi has not fully explained how Uber plans to eventually turn a profit. But he frequently compares the company to Amazon, the e-commerce giant that lost money for years as it diversified into other businesses before using its platform to turn a profit.

“What began as ‘tap a button, get a ride,’ has become something much more profound,” Mr. Khosrowshahi said in Uber’s paperwork to go public.

Let's block ads! (Why?)