Uber stock price gaps 6% higher, company withdraws forecast

Shares of Uber (NYSE:UBER) opened more than 6% higher on Friday after the company said it is withdrawing its financial guidance for 2020. The ride-hailing giant also said it will write down about $2 billion in investments, as the coronavirus outbreak facilitates great impact on its business.

Fundamental analysis: Investors breath a sign of relief

The California-based company said that it is forced to withdraw its financial guidance for 2020 due to uncertainty amid the coronavirus outbreak. 

Moreover, Uber is writing down some of its minority investments worth between $1.9 billion and $2.2 billion. Uber holds stakes in China’s Didi Chuxing and Southeast Asia’s Grab, estimated at $10.3 billion at the end of last year.

The ride-hailing company also said it expects its revenue to drop by $17 to $22 million in Q1, in addition to the estimated $60 to $80 million in Q2. These figures look much better than what investors were expecting from Uber. 

Last month, CEO Dara Khosrowshahi said that Uber’s booking declines in Seattle had reached 60% to 70% on an annualized basis.

Technical analysis: Stock price fails to sustain a rally

Shares of Uber opened more than 6% higher today, but the buyers were unable to sustain the positive momentum later in the Friday’s session. Hence, nearly all morning’s gains are pared back as the price action attempts to close the week above an important resistance around the $28 mark. 

The buyers are aiming to test the confluence of resistance above the $30 mark as the stock price recovers from its all-time low printed below the $14 handle. Looking at the downside, the area around $25.50 hosts very strong support for the Uber bulls. 

Summary

Shares of Uber are trading around 3% higher in New York today, despite opening more than 6% higher after the company said that it was withdrawing forward guidance, while also writing down around $2 billion in investments.