Uber’s stock plunges for a second straight day

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While both companies are trying to find ways to lower driver costs to become profitable, drivers went on a protest in several USA cities earlier this month demanding job security, livable incomes and a cap on the amount ride-hailing companies can collect from fares.

Shares in ride-hailing company Uber lost another 10 per cent on Monday, dipping below $37 USA per share only days after the company went public at $45 U.S. per share.

The declines came during an especially bad day for the stock market, which reacted harshly to the Trump administration and China restarting their trade war.

Uber lowered its valuation expectations twice in the past two months to address investor concerns over its mounting losses, and finally priced its IPO at the low end of the targeted range in a bid to avoid Lyft's stock market struggles.

"Obviously our stock did not trade as well as we had hoped post-IPO".

Uber's rival Lyft saw its shares soar on their first day of trading in March, before the value of the company began to sink.

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Ives says many investors he spoke to were hesitant to buy Uber out of the box given the beating Lyft has taken since its IPO. But if the stock's weakness does persist into June in the lead-up to Uber's first earnings report, the analyst community may have no other choice but to change their tune.

The company raised about $6.8 billion by selling almost 140 million shares between December 2015 and February 2017 at a price of $48.77 a share, including a sale of about 71.8 million shares to Saudi Arabia's Public Investment Fund.

"Remember that the Facebook and Amazon post-IPO trading was incredibly hard for these companies", he said. Analysts say that Uber must execute flawlessly over the next 18 months to achieve a market value of $100 billion US or more. But it is essential for us to keep our eye on the long-term value of Uber for our customers, partners, drivers and investors, ' wrote Khosrowshahi.

Uber has never made a profit - and warned in its lengthy but lightly informative investment prospectus for the float that it may never do so.

Jay Ritter, a University of Florida professor of finance specialising in IPOs, said it was highly unusual for a high-profile company like Uber to fall so quickly. "A core tenet of our bull thesis on Uber is around the company's ability to morph its unrivaled ridesharing platform into a broader consumer engine". Over the past five years, just 10% of similar companies finished their first day of trading below their IPO price, Kennedy said. Lyft's preopen share price was $72 and it closed its first day at $78, but as of Monday, its shares are down roughly 39% to $47. We tend to see high levels of volatility in a stock around its IPO. "I think we are looking at a duopoly in North America".

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