Uber extends losses following last week's rocky debut

Uber extends losses following last week's rocky debut

Call it poor timing, unfortunate circumstances or just hype gone bad, but Uber Technologies Inc. Marty Wolf, president of investing firm, MartinWolf, said that Uber's share price hard could cause trouble for WeWork, the office sharing space company and its plans to go public.

Asian stocks and European shares edged lower Monday as global markets await details of how China will retaliate against the USA after President Donald Trump moved to further hike tariffs on Chinese imports late last week.

The stock closed at US$41.57, and Uber joined a small group of major IPOs that ended their first day down.

Uber chief executive Dara Khosrowshahi urged employees to look past the rough patch on Wall Street and stay focused on better days ahead, according to an internal email obtained by AFP.

After the opening bell, Uber's stock continued to fall, reaching as low as $37.17 at one point, as it hit a ideal storm of investor skepticism and broader market anxieties about the ongoing trade war between the United States and China.

It will issue 180m new shares, while existing investors, including directors, co-founder Travis Kalanick and its largest shareholder, the $100bn SoftBank Vision Fund backed by Saudi Arabia, are also selling the stock. That stock fell 6% Monday and is now down more than 33% from its IPO price.

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The ride-hailing giant, which went public on Friday, six weeks after its rival Lyft, sputtered to a 7.6% loss in its stock market debut, wiping out $655 billion of investor wealth. This means it is not unlike Amazon, Facebook or even Apple - companies that are true pioneers in their industry.

Like all periods of transition, there are ups and downs. "But we have all the capital we need to demonstrate a path to improved margins and profits", Khosrowshahi added. The road to profitability for Lyft and UBER is far from clear.

This view was recently expressed by Dan Ives of Wedbush Securities, who told Yahoo Finance that Uber can still become a $100 billion company. "A core tenet of our bull thesis on Uber is around the company's ability to morph its unrivaled ridesharing platform into a broader consumer engine".

Uber slid in early NY trading on Monday in its second day of declines after a disappointing IPO on Friday. That was below the lower end of the expected price range of $44 to $50 Uber gave earlier this week, for its 180 million shares, with an overallotment option for an additional 27 million shares.

"During times of negative market sentiment, the pessimistic voices get louder, and the optimistic voices pull back", he wrote.

The stock is now priced below $38.00 for a total market cap of $63.3 billion. "I think we are looking at a duopoly in North America".

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