May 10, 2019 - Technology

Uber's IPO is trending down

Reproduced from Renaissance Capital; Table: Axios Visuals
Reproduced from Renaissance Capital; Table: Axios Visuals

Sentiment for Uber's initial public offering has fallen precipitously since the company announced it would go public.

Where it stands: After initially setting sights on a $120 billion valuation, the company said it raised $8.1 billion after pricing shares near the bottom an already marked-down range. The price gives the San Francisco-based company a non-diluted market value of $75.5 billion.

What happened: Part of Uber's fall from grace has been Lyft's poor performance as a public company and the stock market's dreary week, but Uber also is fighting newly woke investors worried about its penchant for losing money.

  • A survey of 50 hedge funds by investment adviser Titan found that 70% of respondents were not positive on the IPO, including 46% who were bearish.
  • The "market will need to see signs of improvement in unit economics and a path to breakeven to justify the current valuation," one respondent said.

Yes, but: Uber's IPO is still set to be among the 10 largest U.S. listings ever, and the biggest since Alibaba's $25 billion offering in 2014. The ride-hailing company sold 180 million shares for $45 each, coming in at the low end of the $44 to $50 marketing range.

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