Equity Shot transcribed: Judging Uber’s less-than-grand opening day

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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Uber’s first day as a public company didn’t go so well

Ouch. Yikes. Oof. Sigh.

Those are some of the friendlier phrases I imagine came out of the mouths of bankers, investors, executives and really anyone who has been paying close attention to Uber’s road to the stock markets today when the company debuted on the New York Stock Exchange below its initial public offering price.

The ride-hailing business (NYSE: UBER), previously valued at $72 billion by venture capitalists, priced its stock at $45 apiece for a valuation of $82.4 billion on Thursday. It began trading this morning at $42 apiece, only to close even lower at $41.57, or down 7.6% from its IPO price.

Still, the IPO was successful enough for Uber. The business now has $8.1 billion on its balance sheet to invest in growth and, ideally, transform into a profitable business.

Anyone who expected Uber to climb past $100 billion at its IPO is surely disappointed. And those who projected a valuation of some $120 billion, well, they’re probably feeling pretty dumb. Nonetheless, Uber’s new market cap makes its exit one of the most valuable in history, and represents a landmark event for tech, mobility and the gig economy at large.

Where the stock will go from here, who knows. Lyft, as we’ve observed, has taken quite a hit since it completed an IPO in March. The Uber competitor is currently trading at a higher price than Uber: $51 per share with a market cap of about $14.6 billion. Its stock has fallen all week long, however, after the company posted losses of more than $1 billion in the first quarter of 2019.

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Uber’s trading debut: who was (and wasn’t) at the opening bell

Uber finally made its debut Friday on the New York Stock Exchange, ending its decade-long journey from startup to publicly traded company.

So far, it’s been a ho-hum beginning, with shares opening at $42, down from the IPO price. The share price is hovering just under $44.

Thirteen people, including executives, early employees, drivers and customers, were on the balcony for the historic bell ringing that opened the markets Friday. Noticeable absentees were co-founder Garrett Camp and former CEO and co-founder Travis Kalanick, who was ousted from the company in June 2017 after a string of scandals around Uber’s business practices.

Kalanick, who still sits on the board and has an 8.6% stake in Uber, wasn’t part of the opening bell ceremony. However, Kalanick and Camp were both at the NYSE for the event.

Here is who participated in the opening bell ceremony.

The bell ringer

Austin Geidt, who rang the bell, was employee No. 4 when she started as an intern in 2010, and is one of Uber’s earliest employees.

Geidt joined Uber in 2010 and has since worked in numerous positions at the company. She led Uber’s expansion in hundreds of new cities and dozens of new countries. Geidt now heads up strategy for Uber’s Advanced Technologies Group, the unit working on autonomous vehicles.

Executives

CEO Dara Khosrowshahi stood next to Geidt at the opening of the market Friday. Khosrowshahi joined Uber in 2017 after Kalanick resigned and the board launched an extensive search for an executive who could change the culture at the company and prepare it for an eventual IPO.

Khosrowshahi was the CEO of Expedia before joining Uber. Khosrowshahi gave a one-year update on his time at Uber during TechCrunch Disrupt in September 2018.

Uber CTO Thuan Pham has been with the company since … Read the rest

Uber opens at a disappointing $42 per share

At long last, it’s lift-off for Uber. After pricing its initial public offering at $45 per share, at the bottom end of the range it set previously, to raise $8.1 billion, the transportation startup began trading today on the New York Stock Exchange, and the shares opened at $42, down from the IPO price.

Ahead of Uber finally making its debut, the company had an indication price that went as low as $42 ahead of live trading. With the overall market in a slump this week over trade woes with China, it’s a challenging time to list, to say the least.

Uber had raised $28.5 billion as a private company from no less than 166 different backers, with its last valuation in the region of $75 billion. The $82.4 billion valuation that it finally settled on for the IPO (selling 180 million shares at $45/share) is definitely up from that, but far from the lofty projections of $120 billion that banks and analysts that floated in the months leading up to today.

The figures nevertheless cement Uber, alongside Alibaba and Facebook, as one of the most valuable tech IPOs in history, and a major beacon for breaking ground in a new area of tech, transportation.

But if it is the sheer scale and potential of Uber that catapulted it to such financial heights (real and imaginary), it’s the bare financials that have tempered some of those notions.

On one side, Uber essentially created and currently dominates the market for on-demand transportation, which started with the premise of connecting drivers with passengers by way of an app that tracked the location of both, but eventually evolved into a wider two-sided marketplace ambition that brings together different modes of transportation — including bikes, public buses and more — with … Read the rest

Uber prices IPO at $45 per share, raises $8.1B

Uber has set its initial public offering at $45 per share, per reports, raising $8.1 billion in the process.

The price, which falls at the low end of Uber’s planned range, values Uber at $82.4 billion. Uber confirmed the price in a press release Thursday afternoon.

The pricing comes one day after drivers all over the world went on strike, with drivers in San Francisco protesting right outside the company’s headquarters.

Uber filed for its IPO last month, reporting 2018 revenues of $11.27 billion, net income of $997 million and adjusted EBITDA losses of $1.85 billion. Though, we knew this thanks to Uber’s previous disclosures of its financials.

But this is not the first time we’ve seen Uber’s financials. Over the last couple of years, Uber has willingly disclosed many of these numbers. Its last report as a private company came in February when Uber disclosed $3 billion in Q4 2018 revenue, with rising operating losses.

From ridesharing specifically, Uber’s revenues increased from $3.5 billion in 2016 to $9.2 billion in 2018, with gross bookings hitting $41.5 billion last year from ridesharing products.

Competitor Lyft filed its S-1 documents in March, showing nearly $1 billion in 2018 losses and revenues of $2.1 billion. It reported $8.1 billion in booking, covering 30.7 million riders and 1.9 million drivers. About a week later, Lyft set a range of $62 to $68 for its IPO, seeking to raise up to $2.1 billion. Since its debut on the Nasdaq, Lyft’s stock has suffered after skyrocketing nearly 10% on day one. Lyft is currently trading about 20% below its IPO.

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