Uber officially listed its shares on the New York Stock Exchange (NYSE) on 10 May 2019. The company closed its first trading day with a final valuation of $69.7 billion. Find out where the shares could go next, as well as how you can trade CFDs on the share price of Uber.
Uber officially listed its shares on the New York Stock Exchange (NYSE) on 10 May 2019. The company closed its first trading day with a final valuation of $69.7 billion. FInd out where the shares could go next, as wll as how you can trade CFDs on the share price of Uber.
Uber's live market
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When did Uber List?
Uber listed on the New York Stock Exchange (NYSE) on 10 May 2019.
What is Uber valued at?
Uber is offering 180 million shares, with expected net proceeds of approximately $8.4bn - based on the middle of the $44-50 range. The total number of shares considered after this offering and private placement is 1,676,959,021, leading us to suggest a valuation of $73.78bn - $83.85bn. This is lower than some other brokers, as we have excluded optional shares and unexercised warrants.
These figures are a far cry from the biggest giants of the tech world - Amazon and Apple - which hve both achieved trillion-dollar valuations. However, if the ride-hailing app does indeed achieve $80 billion, this will put it well ahead of the values of traditional car manufacturer Ford Motor Co (All Sessions) and electric car company Tesla Motors Inc (All Sessions). Competitor Lyft pales in comparison, with its valuation hitting $24.3 billion during its IPO.
Why did Uber list on the stock market?
Uber is launching an IPO because the board agrees that it’s time for the business to go public. This is a departure from the approach of previous CEO, Travis Kalanick, who tried to delay going public as long as possible. Current CEO, Dara Khosrowshahi, feels that Uber already has all the disadvantages of a being a public company – a reference to the negative media attention it has received due to its financial and legal battles – without being able to enjoy the advantages. There are of course great benefits in going public – primarily to raise capital to expand the business, instead of having to borrow the money. It can also help generate publicity and boost reputation. Khosrowshahi claims that the previous CEO is now fully on board with his IPO plans.
Who are Uber's investors?
Uber’s current investors are, among others, the Toyota Motor Company, Amazon founder and CEO Jeff Bezos, Fidelity Investments, SoftBank, Tencent Music, and dozens of other notable individuals and businesses. As of October 2018, Uber is funded by 96 different corporate and private investors and has raised more than $22 billion from its capital ventures and investors. This makes it the number-one rated unicorn (a private company valued at over $1 billion) in the world.
What’s the outlook for Uber?
Uber’s road to profitability has been a rocky one. Despite accumulating sales of $7.5 billion in 2017, it posted losses of $4.5 billion – and it has been hampered by setbacks such as the fatal collision of one of its driverless cars, and ongoing negative media attention on its company culture. It is also seeing increased competition from rivals such as Lyft, although the CEO seems confident that there is space for both in the marketplace.
However, many signs are pointing to the increasing success of Uber – not least it’s sky-high valuation. It turned its first profit in the first quarter of 2018, and the popularity of its ride-hailing app is continuing to grow. The new CEO is working hard to reinvent the brand’s image, and if investors trust the business model and see potential in the growth of the business, they are likely to take the risk of buying into the IPO. A lot of Uber’s future success depends on its ability to expand its offering – using its smart technology to further its transport offering and food delivery service and scale the business internationally.
What is Uber’s business model?
Uber’s business model is based on the aggregator approach, where passengers are connected to taxi cabs through an app. A passenger opens the app, enters their destination, and sees the approximate fare for their trip. If they agree to the price, the cab nearest to them will then be alerted to the passenger’s location and pick up the ‘call’. The cabs belong to the drivers contracted to Uber – not Uber itself – and the driver gets a portion of the fare. The strength of this business model lies in its innovative systems and infrastructure, and the demand for the service has proven that consumers believe in the brand.
How has Uber been performing?
Uber is considered something of corporate anomaly, having grown so fast yet lost so much money in a relatively short period of time. It has raised billions in capital and grown the business at an exponential rate since its launch in 2009. Although it is not yet a public company, it has recently started disclosing its earnings to reporters.
In the first quarter of 2018, Uber finally turned a profit of $2.5 billion – thanks to deals made in southeast Asia and Russia – however, Q2 revealed another loss of $900 million. Finally, Uber suffered a loss of $939 million in the third quarter and $768 million in the fourth quarter. Its CEO has said that Uber is willing to take some short-term losses because of the long-term growth potential.
Uber vs Lyft
Rival Lyft beat Uber to market, as it held its IPO in March 2019. Uber CEO, Dara Khosrowshahi, said that he is not concerned about Lyft, as he believes there is enough public demand for both companies.
While there are many similarities between Uber and Lyft, Uber remains the bigger business – with a presence in more than 70 countries. Both ride-hailing companies compete heavily on pricing. They charge similarly per ride, often run the same promotions, and use price surging when demand increases. The apps also function similarly, and some riders normally just choose the service that’s closest to them (also keeping in mind that Lyft operates in fewer countries). Besides having the most coverage, Uber also has more ride options, from luxury vehicles to Uber vans. Lastly, Lyft has been valued at more than $24 billion when it went public in March 2019, while Uber had a much larger market cap of around $69.7 billion.