Uber debuts on Wall Street while Dow Jones is down

The ridesharing company debuts on Wall Street as the Dow Jones tumbles.

Uber’s IPO is set to launch on Wall Street after pricing its stock at $45 a share and under the stock symbol 'UBER'. Though the share price is $45, Uber stock's first trade was at $42. The ridesharing company is valued at $75 billion and will raise $8 billion. Uber's IPO debuts as the Dow Jones is down with US tariffs rising on Chinese made goods. Uber's IPO is set to be the largest since social media giant Facebook went public in 2012.

Will Uber’s IPO live up to the hype?

Uber’s IPO will be watched closely as rival Lyft's stock has plummeted since its debut. Uber chief executive officer(CEO), Dara Khosrowshahi, said that Uber’s share price may build slowly like Amazon’s stock after its debut in 1997.

‘So a lot of private companies now are holding off much longer before they go public. We are much bigger, much more mature as a company as we go public, and if you do look at the growth rates, our audience is growing 33% on a year on year basis, transactions are growing 36%,’ said Khosrowshahi.

Because of the diminished Lyft share price, Uber’s large reported losses, and current Wall Street volatility, Uber’s stock will face a great amount of unpredictability.

What's next for Uber's IPO?

Kathleen Smith, principal of Renaissance Capital, noted that the ridesharing company still has to control costs before it’s profitable as a unicorn IPO.

‘It's amazing what [Uber has] built, but they are still not done doing it. They've been subsidising the business,’ said Smith.

Analysts at Bernstein Research see investors that are bullish and bearish on Uber stock both have valid arguments.

‘Bulls on mobility services can claim almost limitless potential for penetration upside,’ said Bernstein analysts.

However, bearish investors can make a claim against Uber as well, according to Bernstein analysts.

‘Uber and Lyft each took almost a decade to get to their present scale, are seeing growth slow, and incinerate cash at impressive rates while showing modest operating leverage,’ noted the analysts.

Since Uber’s IPO had a less-than-stellar debut on Wall Street, Uber’s IPO is going to be further analysed to see if its share price will improve over time.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

See an opportunity to trade?

Go long or short on more than 17,000 markets with IG.

Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.