Another day, another episode of Equity. This time it was an emergency episode, because Uber (finally) went public and a lot of financial folks were quite looking forward to how it would perform on opening day. Turns out it didn’t do so well.
Kate and Alex had a lot of questions about why? Was it the company’s fault? Was it simply the macro market? Was it something else altogether? And then there was the fact that it wasn’t a great week for the stock market or U.S.-China trade relations.
But don’t cry for Uber. As Kate Clark reported, the ride-hailing company still has $8.1 billion to play with to grow itself into a more profitable company.
And now we watch as Uber navigates the public markets.
Kate: Uber was a different story [than Lyft]. I think we expected a really similar pricing scheme, but we saw Uber set a price range of 44 to $50 per share. And they ultimately priced at $45 per share only to sink pretty significantly right off the bat. They began trading this morning at $42 a share and now they’re-
Alex: Shocking.
Kate: Yeah. Now they’re, what? Floating at around $41. So they’re dropping. I think everybody is a little bit surprised by that.
Alex: Yeah. So the reason why we thought they were going to raise their range was because it felt a bit conservative. The 44 to $50 per share IPO target range for Uber felt like almost a mulligan. Like, “We’ll put it out there. We’ll get 3X demanded at the top end. We’ll raise the range four or five bucks a share, price it towards the top into that, get the valuation where we want it.”
Alex: And to see them price it 45 is shocking.
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