Uber’s IPO Didn’t Go Quite as Expected, But the Company Still Raised Billions
When Uber first launched ten years ago, it almost instantaneously became a household brand. However, despite its success on the business front, the company has occasionally been marred by controversies such as gender discrimination and a breach of business ethics. All the same, the ride-hailing app has always managed to come out of troubled waters unharmed.
IPO Anticipation
The company just went public earlier this month in what was probably the most anticipated IPO in the history of the stock market. It was also highly valued, but it hasn’t exactly been the enviable start the company wanted which meant that the company would find it a daunting task to turn profits. And naturally, investors were worried.
After the initial public offering went live, shares tanked and went down by more than 7%. This was on Thursday, 9th May, with the day ending on a low. Business analysts had predicted a share price ranging anywhere between $44 and $50, and the company priced them at $45 per share.
Uber’s IPO made 180 million shares available to the public, making $8.1 billion in total. This is a far cry from the $120 billion valuation (by Goldman Sachs and Morgan Stanley) the company had received in the build-up to the public offering, prompting some investors to put up their shares for sale, 27 million to be specific.
A more reasonable company valuation set it at $82 billion, which is also miles from the actual $8 billion. Admittedly, the IPO completely diluted the mega-billion talk. Still, bankers and analysts alike expect it to be among the most valuable Silicon Valley IPOs this year.
UBER
In the NY Stock Exchange, the company’s shares will trade under the UBER symbol. If you’re thinking about getting yourself some, Warren Buffett’s remarks may make you a little apprehensive. The magnate is steering clear of the Uber stock and says that he rarely buys into IPOs.
That being said, investment is a risk that one takes expecting returns but knowing it may fail to pay off. For an individual investor, it is always best not to buy shares on the actual IPO day. Get the shares later and leave that specific day for institutional investors.
The fact that the company has been registering serious losses (to the tune of $1 billion) annually has also been a source of great concern. Will Uber’s shares be really profitable? The company, in its S-1 filing, admitted that it may just never be profitable. Why then, are investors still pouring money into it?
Most of them are in it for the long term. According to most analysts, investors are going in not thinking of the ride-hailing services, but others such as UberEats and UberFreight. While its umbrella company was making hefty losses, UberEats made $1.5 billion last year. So overall, investing in the company seems really plausible.
And despite the IPO being a flop on many accounts, this isn’t to say that it didn’t make money for its investors. The company’s founders along with its earliest investors can smile all the way to the bank to check on their handsome returns.
More in Business
-
`
Streaming Giant Netflix Faces Yet Another Challenge
In the ever-evolving landscape of streaming entertainment, Netflix, once the unchallenged king of digital content, now faces a complex puzzle beyond...
December 1, 2023 -
`
Signs You Should Quit Your Current Job & Move On
You Don’t Feel Comfortable at Work Imagine spending the majority of your waking hours in a place where you feel uneasy,...
November 20, 2023 -
`
How to Adjust and Renew Your Portfolio
Investing in the financial world is like navigating an ever-changing landscape—constantly evolving, always shifting. The key to staying on track? Regularly...
November 18, 2023 -
`
Dr. Dre’s Divorce With Nicole Young: A Closer Look
When the beats of old-school hip-hop start bumping, Dr. Dre’s name reverberates in fans’ minds worldwide. Born as Andre Young, this...
November 12, 2023 -
`
Why Branded Content Is the Best Way to Connect With Your Audience
Have you ever found yourself deep in a compelling article or engrossed in a video series, only to later discover that...
November 5, 2023 -
`
Why the Gender Pay Gap Could Be Getting Worse | New Research Findings
At a time when women are making significant strides in various professional arenas, a new report throws light on a trend...
October 28, 2023 -
`
What Is a Bull Market and How Can Investors Benefit From One?
In finance, the term “bull market” is frequently used to describe a period of optimism, rising asset prices, and investor confidence....
October 19, 2023 -
`
A-List Power Couples Where the Women Make More Money
In an era of shifting gender roles and evolving definitions of success, it’s increasingly common to find celebrity couples where the...
October 15, 2023 -
`
Massive Price Cuts: Tesla Only Witnesses ‘Modest’ Sales Gain in China
Cutting Down Prices, But Not Cutting the Mustard? Summer 2023 brought with it a promise of sunshine and relaxation. For Tesla...
October 8, 2023
You must be logged in to post a comment Login