Uber IPO Records Worst Dollar Loss for U.S. Debut Since 1975
Uber makes unfavorable history as its first day of public trading sees a 7.6% drop, resulting in over $600 million in paper losses for IPO investors.
Uber makes unfavorable history as its highly anticipated initial public offering falls flat on its first day of trading. Shares drop 7.6% to just under $42, resulting in a collective $618 million in paper losses for investors who bought the IPO shares at $45. According to IPO expert Jay Ritter, this marks the worst dollar loss for a U.S. IPO debut since 1975.
The disappointing launch places additional pressure on major backers like Saudi Arabia's sovereign wealth fund, who purchased shares at prices above the $45 IPO mark. This poor performance follows a similar lackluster reception for rival Lyft, whose stock drops 35% since its own April debut. The broader market also weighs heavily on the ride-sharing giant as escalating trade war tensions between the U.S. and China rattle investor confidence.
Despite the historic stumble, a rough first day does not necessarily dictate the long-term trajectory of a transformative company, as evidenced by Facebook's early IPO struggles. Some market critics even argue that deliberately pricing an IPO low to guarantee a first-day pop leaves crucial growth capital on the table. Regardless of these broader debates, this remains a highly disappointing start for a company that hoped to make a very different kind of history.