There is certainly a more cautious tone to this one than when its big rival, Lyft, listed. Shares in the latter have fallen over 30% since IPO day. Fears that this is just the froth at the top of a tech bubble are surfacing. However with the pricing range there is a big chance of a significant pop on the day, even if one remains of a conservative disposition and wonders about the fundamentals and whether Uber can ever be profitable. FOMO will win the battle on the day, but maybe not the war.
Uber will be valued at between $80.5bn and $91.5bn, well below the $100 bandied about for some time but still well ahead of the last funding round in August, when the company was valued at around $76bn.
The FT reports that Uber will price at or below the midpoint of that range. I would anticipate a big pop on the day if that were the case, as this is already a fairly conservative range.
The latest financial figures raise as many questions as they answer. In Q1 2019, Uber made a net loss of $1bn, on revenues of $3bn. That represented growth of 18-20 per cent, solid enough, but well down from the 70 per cent growth a year ago.
Last year’s numbers also present investors with problems. 2018 revenues rose 43% last year to $11.3bn from $7.9bn in 2017 – good but slower than that of the prior year when we saw revenues double. The company burned $2.1bn in cash in 2018, albeit down from $4.5bn just a couple of years before. Meanwhile, revenues from the core ride-hailing division have flatlined over the last two quarters. Uber’s revenue for the fourth quarter came in at $3 billion, up 25 percent from the same quarter last year, but this was lower than the 38 percent in Q3.
Lyft casts something of a shadow over the Uber IPO. Having been aggressively priced ahead of going public shares in Lyft are now down over 30 per cent from where they were on IPO day. Lyft is a spectre in another sense – gaining market share from Uber. Indeed, it’s not just Lyft – Uber is losing market share to many other local rivals in a number of geographies. In the US and Canada it’s barely recovered from its 2017 annus horribilis.
Lyft’s Q1 earnings have been said to cast a pall over the Uber IPO. I would be less certain about that – it was a huge loss for sure, but below last year. Uber has said that 2019 will be when losses peak. I wouldn’t be surprised if the people selling Lyft stock are simply doing so in preparation for the Uber listing.
Stocks choppy after sharp risk reversal, gilt yields strike fresh lowsRead More
Risk rolls over in early US tradeRead More
Stocks tread water, US jobs numbers on tapRead More
Natural gas update – EIA sees rising pricesRead More
US oil inventories preview: EIA raises WTI price forecastRead More
Investors eye UK mini budget, gold heads to $1800 as stocks slip againRead More
Equities feel the hangoverRead More
Banks lead European stocks higherRead More
Week Ahead: Pressure builds on RBA to go negative, high hopes for US ISMRead More
Markets.com is the state-of-the-art trading platform provided by Markets.com. As part of the TradeTech Group, a constituent of Playtech, a FTSE 250 listed company, at Markets.com we have deep knowledge of the financial markets and an incredible range of resources to continually raise the bar in the world of financial trading.
Markets.com, operated by Safecap Investments Limited (“Safecap”) Regulated by CySEC under License no. 092/08 and FSCA under Licence no. 43906.
Markets.com, operated by TradeTech Markets (BVI) Limited (“TTMBVI”) Regulated by the BVI Financial Services Commission (‘FSC’) under licence no. SIBA/L/14/1067.
Markets.com operated by TradeTech Alpha Limited (“TTA”) Regulated by the Financial Conduct Authority (“FCA”) under licence number 607305.
Markets.com, operated by Tradetech Markets (Australia) Pty Limited (‘TTMAU”) Holds Australian Financial Services Licence no. 424008 and is regulated in the provision of financial services by the Australian Securities and Investments Commission (“ASIC”).
Markets.com, operated by TradeTech Markets (South Africa) (Pty) Limited (“TTMSA”) Regulated by Financial Sector Conduct Authority (‘FSCA’) under the licence no. 46860.
Selecting one of these regulators will display the corresponding information across the entire website. If you would like to display information for a different regulator, please select it. For more information click here.