Uber's hopes of a surge in the price of its shares have fallen flat, as investors gave the taxi-hailing app's eagerly anticipated stock market float a frosty reception by sending the shares below their launch price. Uber put a price of $45 on its shares valuing the company at $80bn (£61.4bn) Early trading data from Wall Street showed its shares were quickly changing hands at below the opening price in early trading, dipping about 7% to about $42 against the backdrop of a stock market suffering its fifth consecutive daily decline amid trade war fears. By the end of its first day of trading, Uber shares had dropped to $41.57, down 7.6% on its opening price, with a market cap of $69.7bn. The stock continued to drop in after-hours trading.
Who wants to invest in a company that has never made a profit, admits it may never do so and is on the brink of war with its global workforce? Probably a fair old chunk of Wall Street, as it happens. This week Uber, the ride-hailing and food delivery service, will put a price on the shares it will issue in the largest tech company float since Facebook in 2012. The San Francisco-based company hopes to raise $10bn in a listing valuing it at $90bn. Dara Khosrowshahi, the chief executive, embarked on a pre-float roadshow last week, touring hotel function rooms from New York to London, addressing halls thronged with investors and asking them to give Uber a five-star rating.
US company Lyft has filed plans with the regulator in Washington for a flotation as it races for funding against Uber, the rival ride-hailing company. In a statement on Thursday, Lyft announced it had submitted a draft registration statement with the US Securities and Exchange Commission (SEC), in a move which sets it up to be one of the first large tech flotations of 2019. The number of shares on offer and the price range for the proposed offering have not yet been determined, Lyft said. The company was valued at $15.1bn (£11.8bn) at its latest funding round in June, when investors led by Fidelity Investments poured $600m into the firm. Uber, by contrast, has been valued at $120bn in recent reports.
Uber's self-driving car unit has been valued at $7.3bn (£5.6bn), after receiving $1bn of investment by a consortium including Toyota and Saudi Arabia's sovereign wealth fund. With weeks to go until the loss-making San Francisco firm's stock market float, expected to value the company at up to $100bn, Uber said it had secured new financial backing for its plans to develop autonomous vehicles. Japanese carmakers Toyota and its compatriot Denso, a car parts supplier, will invest a combined $667m in Uber's Advanced Technologies Group (ATG). The remainder will come from Japanese conglomerate SoftBank's $100bn Vision Fund, whose largest investor is Saudi Arabia. Toyota and SoftBank are already major investors in Uber, with the latter owning 16%.
Uber Technologies Inc.'s incoming chief executive officer, Dara Khosrowshahi, inherits an embattled global business with crises sprawling across continents. Since Uber's founding in 2009, the San Francisco-based company has tested the world's tolerance for disruption and rule-breaking. The company's toe-stepping ways, overseen by co-founder and former CEO Travis Kalanick, helped the ride-hailing company grow to more than 600 cities and a $69 billion (about ¥7.45 trillion) private valuation. But the startup's aggressive approach left a trail of self-inflicted wounds along the way. Those controversies -- including raising doubts about a passenger's rape, the use of software meant to evade law enforcement officials, an intense human resources investigation sparked by sexual harassment charges, and a fierce legal battle with Alphabet Inc.-- ultimately felled Kalanick after some of Uber's largest investors asked for his resignation in June.