The price of securities amounted to $41,6, which is almost 8% less than expected
Value per share service Uber taxi in first day of trading after the IPO, on may 10, was on the new York stock exchange $41,6 apiece. This is almost 8% less than expected, the company is placing 180 million shares at $45 per unit, according to Yahoo Finance.
Now Uber capitalization was a result of approximately $69.7 billion, which is $12 billion less than forecast by the company. And in October 2018 before the IPO such leading financial conglomerates like Morgan Stanley and Goldman Sachs generally estimated it at $120 billion.
However, the fact that Uber has placed the shares on the background of very adverse conditions, analysts have warned the company for a long time. For example, experts from Bloomberg noted that the service wanted to sell their shares on fears over the escalation of the trade war between China and the United States. Last week, the S&P 500, which takes into account the capitalization of the largest 500 U.S. companies decreased by 2.2%.
Also for such a low rating securities Uber influenced the fall in the value of the shares of its rival taxi service Lyft. As reported by Business Insider, trading in securities of a competitor commenced on 29 March at a price of $72 apiece, and after the auction on may 9 shares Lyft cost 23% less than the offering price of $55,18.
“Companies such as Uber and Lyft, has not been tested during the recession, and it is unclear how sustainable are their business models in a period of constrained consumer spending,” says technology analyst at technology research firm PitchBook Assad Hussain.
He also added that in order to regain the trust of investors, both teams will need to work hard over the next few quarters, while maintaining steady revenue growth and assuring the market that there is a path to profitability.