Uber opens below IPO price after biggest IPO of 2019

Uber IPO

Uber entered a new era as a publicly listed firm on Friday, but shares fell in early trading to $42 (£32.20). The lack of positive excitement for the biggest listing of a US technology company since Facebook in 2012 suggests investors are becoming more choosy. The company's losses may have played on some investors' minds, along with the poor performance of smaller rival Lyft whose shares are down around a quarter since its IPO at the end of March.

Uber has said that it has the potential to grow not just in the cab hailing business, but also as a "superapp" to provide a variety of logistic services, such as grocery and food delivery, organizing freight transportation, and even financial services, much like Grab, its Southeast Asian counterpart. The world's largest ride-hailing service reached a major milestone on Thursday when Uber priced its long-awaited initial public offering at $45 price per share to set the stage for its stock to begin trading on Friday. "We keep moving forward in tough and easy environments, and I think that we as a company will be a great investment over the long term".

Uber's executives and advisers settled on a final IPO price after spending the past couple of weeks pitching to potential investors at roadshow events in cities including New York, London and San Francisco.

But it's relatively uncommon for US technology companies backed by venture capital, like Uber. Kennedy points out that unlike Facebook, however, Uber hasn't been turning profits. The hope among underwriters is that by pricing the stock conservatively, shares will experience a solid first-day gain.

But market experts have struggled to find value in a company that has consistently posted losses, and warned that it may never actually be profitable.

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A market value of less than US$70 billion is a considerable climb down from earlier projections: past year, bankers jockeying to lead the offering told Uber it could be valued at as much as US$120 billion in an IPO.

Uber's cash infusion will help cover the cost of giving rides to passengers at unprofitable prices as it tries to fend off competition from Lyft.

The listing gives Uber another roughly $8 billion to fund investment in its expansion, adding to the almost $25 billion raised in 23 private funding rounds, according to Crunchbase.

SharesPost principal analyst Alejandro Ortiz said the timing for Uber trading to start was bad with the uncertainty over the trade spat with China. One of the most anticipated IPOs in years saw the tech biz value itself at $82bn with a share price of $45.

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