Uber Stock Plunges 18.8% Below IPO Price in Rough Second Trading Day
Uber closes its second day of public trading at $37.25, a significant drop from its $45 IPO price. CEO Dara Khosrowshahi urges employees to focus on the long-term despite the ongoing market struggles.
Uber experiences a rocky start to its public life as the stock closes its second trading day down 18.8 percent from the initial public offering price. Shares drop to $37.25, giving the ride-hailing giant a market capitalization of $62.2 billion, which falls well below the $72 billion private market valuation and the $82.4 billion IPO valuation. This downward trend continues directly from a disappointing first day where shares already fell short of the $45 offering price.
In a memo obtained by CNBC, Uber CEO Dara Khosrowshahi addresses the struggling stock by acknowledging the tough market conditions and the transition period. He urges employees to focus on the long-term vision of the company rather than daily stock fluctuations. To boost morale, Khosrowshahi points to the early public market struggles and eventual massive comebacks of tech giants like Facebook and Amazon.
Uber is not alone in its public market struggles, as rival ride-hailing company Lyft faces similar downward pressure since its March debut. Lyft closes the same day at $48.15 with a market cap of $13.8 billion, highlighting a broader market skepticism surrounding the profitability and long-term viability of the ride-hailing business model. Investors continue to closely watch both companies as they attempt to prove their worth on the public exchange.