Uber's market debut sours most anticipated IPO since Facebook

Uber's market debut sours most anticipated IPO since Facebook

Uber also notes that it has already given $20 million to its drivers to settle a similar lawsuit and expects the amount of settlement money it will shell out this year "will fall within an approximate range of $146 million to $170 million". Trade tensions between the US and China are weighing on investors' minds after President Donald Trump boosted tariffs on $200 billion in goods from China.

Facebook debuted in 2012, and after technical difficulties delayed its start to trading, it ended its first day just 23 cents above its IPO price of US$38. The company, founded in 2009, owns the world's most popular taxi-hailing app and has interests in restaurant delivery, bike-sharing services and self-driving cars.

As of this writing, Uber shares are trading at $43.29. This raised $8.1 billion and valued Uber at $82.4 billion.

As per DealLogic, Uber's weak debut makes it the ninth worst first-day performer of all time with a valuation of $69.71 billion.

Shares of Uber Technologies Inc. resume trading Monday 7.6% below their offering price after Friday's flop.

Matt Kennedy, a senior IPO market strategist at Renaissance Capital, says that over the past five years, just 10 per cent of US technology companies backed by venture capital finished their first day of trading below their IPO price.

That's highly unusual, especially for a high-profile tech company. The trading debut will be closely watched by the cavalcade of other tech startups that are expected to go public this year, including Slack Technologies Inc., Postmates Inc., Peloton Interactive Inc. and WeWork Cos.

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But it's relatively uncommon for USA technology companies backed by venture capital, like Uber.

Beyond Meat ended the week 165% over its IPO price with a valuation of US$4 billion. Pinterest extended gains to close 53% above its listing price of US$19 a share. How is "be willing to lose more money than the other guy, for longer" a viable business strategy, and why would anyone pay any amount of money to invest in it? The San Francisco-based company lost $3.04 billion last year on an operating basis on revenue of $11.3 billion, bringing total operating losses over the past three years to more than $10 billion, according to filings.

Uber is yet to make a profit and warned recently it may never do so.

"The most important sort of statistic to look at is bookings, because that reflects essentially what people are paying for the service", he said.

The disappointing debut suggests the public isn't almost so enthused as venture-capital investors are about Uber and other so-called unicorns that generate billions in losses.

Uber sold 180 million shares for $45 each Thursday, after marketing them for $44 to $50 apiece. Initial reports suggest that the Uber's bankers, Morgan Stanley and Goldman Sachs, had misjudged the demand.

That sobering reality is one reason that Uber fell short of reaching the $120 billion market value that many observers believed its IPO might attain.

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