This Friday Uber has decided to take a gigantic step in its vision to become the largest technology company in the segment of the 'unicorns' that manages to impact its output to the stock market. Wall Street undoubtedly witnessed one of the most anticipated IPO events of the year, since it announced its intention to enter the stock market.
IPO - Price of shares
This 2019 promises to be the year of the IPOs. Already successful cases like Pinterest that has gained 60 percent since its release. Zoom with a value increase in more than double and PagerDuty with 90 percent, undoubtedly prepare an optimistic scenario for Uber despite the losses for more than 30 percent generated by his closest rival, Lyft.
The price of each share of Uber at the time of debut in the New York Stock Exchange is $42 dollars and is identified by the name UBER on the NYSE. Its debut has been disappointing and even below the estimated launch values between the 44 and 54 set on Wednesday, 7 percent more than he managed to leave.
At the time of writing, UBER closed below the US $42, in a session that was not as volatile as expected.
No doubt, a disappointing start for the company and for one of the most anticipated debut in years. Uber had adopted by a conservative strategy, but its price achieved at the start has been a strong setback in its IPO. The company has put a total of 207 million shares on the table and will have a lower valuation than previously.
The company of chauffeurs planned to raise around the US $9,000 million in its initial public offering of shares. However, this number, even when it is maintained, is in doubt if it can be reached.
It was expected that Uber will value between 80 billion and 91 billion dollars, considering options for buying shares and restricted shares. This figure is higher than the valuation of 76 billion dollars given by private investors in August and eclipses rival Lyft, whose valuation was only 24 billion dollars.
The debut of Uber has coincided with a difficult market moment in the midst of an escalation of tensions between the two major economies of the world. The Dow Jones is already feeling the devastating effects of this uncertainty by losing 300 points so far.
However, we will have to wait if Uber manages to take flight as the hour's pass. Its IPO for now, is located in the third box of the most valuable IPO in the United States, behind Alibaba in 2014 with 167 billion dollars and Facebook in 2012 with 104 billion dollars, hence its importance and impact on the markets.
Uber will leave three percent of its shares available for its drivers to agree to buy at the price of the initial public offering.
In addition to the problems of prices, Uber at the time of going public faces a great job challenge at its doors. With multiple protests in the United States and Europe from their drivers who claim labor benefits. The derogation of their status as contractors, something that could cost the company billions of dollars in compensation.
In addition, the 32% decline in the price of Lyft, its closest competitor and point of reference for many because of the similarity of the companies. Hours before their debut, reflects the concern about Uber on the part of investors, about the ability or not of the company to be profitable.
For now, in the short term, it is more than evident that Uber and Lyft will not generate profits, more than their founders and investors in the years of initiation. Given that the heavy investments that are being disbursed to diversify the business will not yet bear immediate fruits.
However, starting from the previous point, once Uber manages to consolidate and fight with the strong competition to enter the new business segments to which it is betting. They will perhaps allow to balance the scales and generate profit for both its employees and its investors.
In this regard, Uber is demonstrating to change its policy and be even more sincere with its employees. The Wall Street Journal mentions, citing internal sources, where the company's employees have consulted their Chief Financial Officer about the feasibility of selling or to stay with the company's stock. This has left a neutral position beyond exhorting employees to keep their shares.
Although there are serious doubts about its performance in recent years and the feasibility or not of profitability in its shares after its IPO. It is worth remembering how the company came to this moment and what kindnesses and weaknesses it has as a listed company, in order that its investors see profitability in their bet capital.