Uber share price down 11% on second day of trading
The ridesharing app's stock is down after debuting on Wall Street.
Why did Uber’s share price fall?
Uber stock has fallen after its debut because of the Dow Jones' overall decline after China raised tariffs on US imports. There was also a weaker appetite for tech stocks after the lackluster performance of Lyft stock. Uber chief executive officer (CEO), Dara Khosrowshahi, noted in a letter to employees that they take a long-term view of Uber stock.
‘Obviously our stock did not trade as well as we had hoped post-IPO. Today is another tough day in the market, and I expect the same as it related to our stock. But it is essential for us to keep our eye on the long-term value of Uber for our customers, partners, drivers and investors,’ wrote Khosrowshahi.
How could Uber’s IPO affect other tech stocks?
Uber’s unsatisfactory IPO could be a bad harbinger for other IPO’s launching this year. Marty Wolf, president of investing firm, MartinWolf, said that Uber’s share price difficult could cause trouble for WeWork, the office sharing space company and its plans to go public. That company is similar to Uber in that it has reported large revenue, but also massive losses.
‘I think that [Uber’s IPO] will be a red flag for WeWorks and its road to profitability. WeWork is also a very complex business, it has lots of losses, and it’s not clear how you get to profitability,’ said Wolf.
Uber’s worse-than-expected performance in the US stock market shows that even a tech company with a large valuation like Uber isn’t immune to the unpredictability of Wall Street.
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