Uber made its trading debut at the New York Stock Exchange (NYSE) last week, but the opening share price was much lower than had been expected at only $45 per share.
$45 Per Share
Ride-hailing (and now scooter and bike hire) company Uber had raised $28.5 billion as a private company from 166 different backers and was last valued at a still very impressive $75 billion. Even though banks and analysts had hinted at a projected figure of $120 billion that Uber looked set to raise in its public share offering, the actual figure turned out to be considerably less – a final valuation of $82.4 billion, selling 180 million shares at $45/share.
Nevertheless, this figure still marks Uber, the dominant player in the market for on-demand transportation, as one of the most valuable tech firms.
Uber is reported as having 93 million active platform consumers (that’s up from 70 million only a year ago), making 17 million trips per day across 700 cities on six continents.
Co-Founder Not On The Balcony at Stock Exchange
At the event, where the NYSE bell was rung while key members of Uber stood on the balcony, the co-founder of Uber did not join the public display (although he did attend the event). Travis Kalanick had to step down from Uber (even though the billionaire still sits on the board with an 8.6% stake) over controversies about business practices. This followed a four-month investigation, with 20 sackings, culminating in Kalanick stepping down.
Even though Uber is the dominant company in its field it is now not without competitors. For example, Lyft, Gett, Heetch, MyTaxi, and Bolt are all now gaining in popularity. In fact, the biggest competitor Lyft, which has a similar business model to Uber, is currently trading at $55 which is below its debut of $78.29 on March 29.
Even though the event at NYSE was supposed to be a triumphant and positive one, some of Uber’s high-profile woes surfaced outside in the form of protests about the alleged treatment of drivers and the impact on cities by Uber. In recent times, Uber has been the subject of driver protests, lawsuits, questions about business practices, and the need to pay attention to regulatory pressures.
What Does This Mean For Your Business?
Uber’s rise to this moment appears to have been meteoric and huge, although investment commentators have noted that going on the pure metric of profit and loss, Uber has been posting losses e.g. a loss of some $1 billion in the last quarter on revenues of $3 billion-$3.1 billion. Uber has faced a lot of controversies, and now has some strong competition, and all of these factors have perhaps been reflected in the lower than expected value per share.
Some market analysts are still concerned about how Uber can turn things around and how patient investors are likely to be although leadership under the current CEO Dara Khosrowshahi, looks promising.