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Uber shares set to drop a further 7 per cent on Monday's stock market

13 May 2019

 

Experts at Reuters, have reported that Uber Technologies Inc shares were set to fall another 7% on Monday, following a poor debut trading session last week. 

 

The falling shares raise more questions about investors’ faith in its ability to make profits. 

Before going public, Uber lowered its valuation expectations twice in two months to address investor concerns over the company’s mounting losses, and priced its initial public offering at the low end of the targeted range. 

 

Uber followed ride-hailing rival Lyft with their IPO launch, but both companies have seen a negative reaction to its shares which have slumped. 

 

Lyft Inc, went public at a price of $72 a share on March 29, but has since lost a third of its market value dropping to $49.50 a share. 

 

Uber shares are said to open at the bell at a price of $38.54, valuing the company at almost $11 billion less than Friday’s debut price of $45. 

 

Both IPOs took place against a backdrop of renewed concerns on Wall Street over global growth due to the trade tensions with China. 

“The current narrative relating to the social economic nature of the ride-hailing segment is negatively having an impact on the shares of both UBER and LYFT,” said Zephirin Group analyst Lenny Zephirin. 

 

Wedbush analyst Ygal Arounian said: “While it will take time for the stock to settle and Uber must execute flawlessly over the coming 12 to 18 months we believe a $100 billion+ market cap is warranted."

 

Image: Source; Pixabay   

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