Uber’s stock falls following IPO

Written by Peter Walker

Uber’s long-awaited Initial Public Offering (IPO) has seen the company valued at $82.4 billion, less than the $100 billion it was hoping for, but still making it one of the largest IPOs of all time.

The San Francisco-based ride-hailing app asked investors to pay $45 per share, according to a regulatory filing published ahead of Friday’s listing on the New York Stock Exchange.

At that price, Uber stated it would raise $8.1 billion to fund expansion into new markets and the continued development of projects such as its driverless car, food-delivery divisions and public transport plays.

However, during its first day of trading, Uber stock fell as much as 8.8 per cent, closing at $41.57.

Investment appetite is thought to have been dampened by poor share performance of shares in rival company Lyft, which floated in March and has since lost 27 per cent of its IPO price.

Uber has never made a profit, and warned in its lengthy prospectus that it may never do so.

It will issue 180 million new shares, while existing investors, including the SoftBank Vision Fund and company co-founder Travis Kalanick, are selling stock.

Uber lost $1.8 billion last year - and latest figures pointed to a further $1 billion being lost during the first quarter this year - although revenues rose by more than 40 per cent to $11.3 billion.

Between taxi and food delivery services, Uber had 91 million users a month at the end of 2018. Users of its vehicles travelled 26 billion miles last year, using 3.9 million drivers.

Buried within federal filings was a revelation that Uber’s long-term goal is to privatise public transportation around the world. Part of its growth strategy is not just to get people out of private cars, but to get them off public buses and trains too.

Those public services would be replaced by Uber Buses, currently being tested in Cairo.

Last year, Khosrowshahi explained that Uber was also switching strategy from taxis to electric bikes and scooters, in a bid to tap into a greater share of the $6 trillion mobility market.