Uber Technologies’ (NYSE:UBER) chief executive expects the ride-hailing group’s shares to remain under pressure in the coming months, Reuters has reported. The comments came after the newly-listed company’s stock more than doubled its losses yesterday, following the Uber IPO flop last week.
This morning, however, Uber’s share price is looking up, having added about 4.02 percent to $38.59 in pre-market trade in New York. The group’s market capitalisation has fallen to about $61 billion since Thursday when the company floated in New York at $45 per share.
Pressure on Uber shares to continue
Uber Chief Executive Dara Khosrowshahi wrote in a memo to employees seen by Reuters that the ride-hailing service’s stock “did not trade as well as we had hoped post-IPO”.
“Sentiment does not change overnight, and I expect some tough public market times over the coming months,” he pointed out, as quoted by the newswire, adding that the company, however, had “all the capital we need to demonstrate a path to improved margins and profits”.
Reuters further quoted Wedbush analyst Ygal Arounian as commenting that Uber investors needed to be patient while the company reached its full monetisation potential with its ride-sharing platform and a broader growth engine with Uber Eats, Uber Freight and autonomous driving initiatives.
Analysts flag impact on other floats
The disappointing Uber IPO, however, could sour sentiment for other tech floats this year, with companies including Slack and Airbnb planning to go public. IG quoted Marty Wolf, president of investing firm MartinWolf, as commenting that Uber’s share price slide could cause trouble for WeWork, the office sharing space company and its market debut plans.
“I think that [Uber’s IPO] will be a red flag for WeWorks and its road to profitability,” he pointed out, adding that the office sharing space company “is also a very complex business, it has lots of losses, and it’s not clear how you get to profitability”.