Why Uber’s IPO went worse than expected
EOThe much anticipated IPO has been the talk of the town, making investors rethink their valuations and strategies. But why was it such a trainwreck? There are a few reasons:
Lyft’s IPO back in March set a bad precedent for Uber. The former’s share price quickly fell below its offering price on the second day of trading, making investors sceptical.
It also didn’t help with Uber’s valuation was down to $100 billion from the $120 billion it was looking at in 2018—and further down to 80-91 billion just before its IPO.
Uber’s growth rate is slowing as geographical expansion is being met with strong local competition. Remember Careem?
Softbank, Uber’s biggest investor, has been putting money into startups such as Didi Chuxing and 99, that are Uber’s competition.
Trump-China trade war has been affecting stock markets.
Dara Khosrowshahi commented on the matter saying nobody can choose the week the company goes public, reflecting on the unfavourable circumstances it encountered. Read more about it here.
Nobody can choose the week the company goes publicDara Khosrowshahi, CEO of Uber