Uber braced for second day of trading after IPO takes a wrong turn
Uber is braced for its second day of trading on the New York Stock Exchange today after its shares veered off course in a disappointing initial public offering (IPO) on Friday.
Shares in the lift-hailing giant closed down 7.6 per cent after its $82.4bn (£63.2bn) float failed to impress investors last week.
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The firm had priced its stock at $45 per share, at the lower end of its target range, as it looked to allay investor concerns after the lukewarm IPO of rival app Lyft.
But the move did not prevent Uber’s shares from going into reverse, with the bumper float not helped by a ramping up in trade tensions between the US and China.
“Last week was not a great day for the company and its advisors to hold the IPO,” said David Buik, market analyst at Core Spreads.
“Market sentiment was poor and companies ‘hell-bent’ on opposing generally-held sentiment tend to pay for it.”
“This company will need a strong supportive shareholder register to take it through these embryonic times, when growing pains will remain in evidence,” he added.
While Uber’s IPO was perhaps the most eagerly-anticipated public listing since the float of Facebook seven years ago, analysts have raised concerns that loss-making tech giants have been overvalued.
Read more: Uber shares begin NYSE trading in $82.4bn IPO
“This doesn’t bode particularly well for [Uber’s] future performance given the concerns expressed in the lead up to the float that it was overpriced, and that its pricing was based on hopes for future growth rather than the expectation of it,” said Michael Hewson, chief market analyst at CMC Markets.
The company is also locked in an ongoing dispute with its drivers, with thousands striking across the UK and the US last week in protest against pay and employment conditions.