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Shares of Uber (UBER) fell more than 7% on its first day of trading Friday, marking a rocky Wall Street debut for a company that endured plenty of bumps on its long road to going public.
Uber opened at $42 a share on Friday, below its IPO price of $45, and ended the day even lower at $41.57. That makes it one of the rare venture capital-backed technology companies to finish its first day of trading in the red.
Its public debut came at the end of a turbulent week filled with headlines about striking workers, steep losses in the ride-hailing industry and broader market jitters over an escalating trade war between the United States and China.
US stocks ended Friday’s session higher, but every major index still recorded losses for the week. It was the Dow’s worst week since March.
Trading this week was marked by worries about a trade war with China after tensions escalated on Sunday.
Both the S&P and the Nasdaq snapped a four-day losing streak, but still had their worst week since December.
Uber (UBER) debut on the New York Stock Exchange today. Its shares started trading at $42 and closed down 7.6%, having priced at $45 yesterday. Competitor Lyft (LYFT) was down 7.4%.
In the Dow, the strongest gainers were Walmart (WMT), Coca-Cola (K) and Procter&Gamble (PG), which had led the field throughout the day.
The Dow bounced back from its earlier losses on Friday after Treasury Secretary Steven Mnuchin and President Donald Trump characterized talks with Chinese negotiators as “constructive.”
Mnuchin’s comments to CNBC led to stocks to move off their lows. Trump followed them up with a tweet, saying the talks would continue and calling his relationship with China’s President Xi Jinping “strong.”
The Dow, which had fallen more than 300 points at one point, turned positive in the final hour of trading. It was last up some 85 points, or 0.4%. The S&P 500 and Nasdaq also rebounded. The S&P was last up 0.2%, while the Nasdaq remained 0.1% in the red. The S&P and Nasdaq have closed lower for the past four days in a row.
Uber’s (UBER) hugely disappointing Wall Street debut is historic. Never has a company this well-known, one that has generated such an insane amount of hype and media coverage, done as poorly on its first day of trading.
The only company that came close to being this big of a flop when it went public was Facebook (FB) back in May 2012. Shares rose less than 1% on their first day.
Here’s a look at how several other high-profile tech firms have fared on their IPO day.
Facebook needs to be reined in.
That’s the message from Democratic presidential candidate Tulsi Gabbard, who was disturbed by Thursday’s op-ed from Facebook co-founder Chris Hughes that argued the company should be broken up.
It shows “how dangerous it is when you have one person, Mark Zuckerberg, who wields incredible power over what pops up in our newsfeeds,” Gabbard, a Congresswoman from Hawaii, said on Friday at the SALT Conference in Las Vegas.
Hughes’ New York Times op-ed described Zuckerberg as more powerful than anyone in the government or even the private sector. He noted that only Zuckerberg can tinker with Facebook’s algorithms to determine what people see on the social network and how to determine what’s considered offensive content.
“We’ve got to break up these monopolies,” Gabbard said, mentioning Facebook and Google specifically.
She called for greater oversight into how big tech companies are “misuing our own private information.”
US stocks bounced back from their lows in early afternoon trading after Treasury secretary Steven Mnuchin said the talks with Chinese negotiators had been “constructive”.
China’s Vice Premier Liu He reportedly said the talks had gone “fairly well”.
The Uber (UBER) IPO may have been a dud. But there’s another company that went public on Friday and its stock is surging. Shares of Chinese online lending marketplace Jiayin Group (JFIN) were up more than 40% in their debut.
Scott Coyle, CEO and co-founder of ClickIPO, an app that allows individual investors to buy and sell shares of new stocks, said there was solid demand for Jiayin among the more than 100,000 people who have downloaded the ClickIPO app.
The success of Jiayin is all the more impressive given the market volatility as of late due to increased trade tensions between the US and China this week and worries about how the Chinese economy could be hit by a prolonged spat.
Coyle thinks the strong debut for Jiayin bodes well for a larger and more well-known Chinese firm expected to begin trading next week: Luckin Coffee (LK). Luckin, which will list on the Nasdaq, has been dubbed the Starbucks of China. Coyle says there has been a fair amount of interest in Luckin from ClickIPO users.
If this trend keeps up, then perhaps Chinese ridesharing giant Didi will do better than Uber and Lyft (LYFT) if it decides to go public.
Uber (UBER) picked a hell of a week to go public.
Sunday
President Trump surprised investors by threatening to impose higher tariffs on China in a tweet. The market swung wildly amid concerns of an escalating trade war between the United States and China.
Tuesday
Lyft (LYFT) reported its first earnings report since going public, which revealed more than $1 billion in losses during the first three months of this year.
At one time, Uber rooted for Lyft to fail. But as the closest proxy to Uber on the public market, Lyft’s stock decline only made Uber’s IPO pitch that much harder.
Wednesday
Uber and Lyft drivers staged strikes in numerous cities around the world ahead of the IPO.
The drivers are seeking livable incomes and job security at a time when Uber will likely only face greater pressure from investors to find ways to move toward profitability.
Friday
The United States has escalated its trade war with China, hiking tariffs on $200 billion worth of Chinese exports hours after trade talks held in Washington failed to produce a breakthrough.
The most highly anticipated IPO of the year had a less than stellar reception on Wall Street.
In a stunning turn of events, Uber (UBER) opened at $42 a share in its Wall Street debut Friday, below its IPO price of $45 a share.
The lackluster debut comes as Uber runs up against broader market jitters over an escalating trade war between the United States and China as well as investor concerns about its chief rival and closest proxy, Lyft.
Stocks remain solidly lower an hour and a half into the trading day, as worries about the next developments in the trade spat between the United States and China weigh on investors.
The Dow fell 300 points, or 1.2%, while the S&P 500 and the Nasdaq are down 1.3% and 1.6%, respectively.
Only five Dow stocks are trading in positive territory:
The stocks leading the decliners:
In the S&P, all sectors besides the more resilient utilities are down.
There was a lot of buzz on Wall Street about Uber’s (UBER) IPO on Friday. But investors on Main Street don’t seem as enthused.
Shawn Cruz, manager of trader strategies for TD Ameritrade, told me from the floor of the NYSE that he was seeing “decent demand” for Uber stock – but not nearly as much as there was for Facebook (FB) and Alibaba (BABA) when they went public.
But that might be a good thing. Unlike Uber rival Lyft (LYFT), which raised its price range and then priced at the top end of it, Uber appears to be going public at a more reasonable valuation.
Uber vs. Lyft
Cruz added that Uber might fare better than Lyft — and not just because it is bigger.
Rapidly growing Uber Eats is a big selling point for Uber. Cruz thinks Uber deserves a valuation closer to delivery giant GrubHub (GRUB) as a result.
We’re still waiting for Uber’s first trade. What will it start at? This could be a hint.
Consumer price inflation for April stood at 2% year-over-year – ticking up from 1.9% to match the Federal Reserve’s inflation target, but undercutting expectations for 2.1% inflation.
President Donald Trump, who has been vocal about his wish the central bank would lower interest rates to stimulate the economy, called the CPI release “really good, very low inflation” in a tweet.
Still, market expectations and presidential hopes for an interest rate cut might be misplaced, according to James Smith, developed markets economist at ING.
According to Smith, the strength in wage growth will gradually put pressure on inflation as the tightness in the job market means companies are increasing pay to retain staff.
In its latest policy update, Fed Chairman Jerome Powell said a weakening in inflation was due to “transitory” factors. All eyes will now be on next month’s numbers.
Travis Kalanick, Uber’s co-founder and former CEO, was not part of the group of insiders that got to ring the opening bell at the New York Stock Exchange as the company made its Wall Street debut.
More than anyone else, Travis Kalanick built Uber (UBER) into a global force through a mix of aggressive fundraising and a take-no-prisoners approach to growth.
But Kalanick was ultimately ousted from his role as CEO in June 2017 after a series of PR crises at the company. He later clashed with members of Uber’s board.
At Uber’s IPO price, Kalanick’s remaining stake in the company is worth $5.3 billion.
While Kalanick wasn’t ringing the bell, he was still at the stock exchange. He watched the Uber festivities from the gallery, not the floor, leaving about an hour after markets started trading.
US stocks dropped at the open after additional tariffs on Chinese import goods climbed to 25% from 10% just after midnight.
Lyft (LYFT) rose 2.2% at the open, as investors are awaiting Uber’s first trade today. Uber (UBER) priced its IPO at $45 per share on Thursday.
Shares of Chinese e-commerce company JD.com (JD) rallied 9.6%, after the company reported better than expected earnings.
Uber and Lyft may look similar, but their ambitions are different. Lyft wants to be a consumer transportation company; Uber wants to be more like Amazon.
Like Amazon, Uber is trying to branch into a broad range of services. The short list includes ride hailing, meal deliveries, freight shipping and even renting out kitchen space. Uber has explored a wider, and arguably flashier, range of transportation options, including boats, helicopters and flying cars.
To help explain Uber’s strategy, the company has repeatedly compared itself to Amazon: “Cars are to us what books are to Amazon,” Uber CEO Dara Khosrowshahi said at one event last February.
A few months later, Khosrowshahi declared that Uber wants to be “the Amazon for transportation.”
Uber ended up pricing its initial public offering more conservatively than expected in part because of the lackluster reception on Wall Street to its chief US rival, Lyft.
Lyft shares fell below its IPO price on its second day of trading and have continued to tumble since. The stock is now down nearly 25% from the IPO price in late March.
Dow futures are pointing to a lower open on Friday after the United States introduced additional tariffs on Chinese imports.
Stock futures for the Dow, S&P 500 and Nasdaq are all in the red, down around 0.5%. The S&P and Nasdaq have closed lower for the past four days in a row. For the week, the three stock indexes are all down more than 2.5%.
In the latest development in the China-US trade spat, American tariffs on $200 billion worth of Chinese goods increased from 10% to 25% at 12:01 am ET on Friday.
Beijing expressed “deep regret over the development” and reiterated that the possibility of retaliatory sanctions.
Uber just completed one of the largest technology IPOs ever. Here are the key numbers to know:
Read more here.
Shares in Thyssenkrupp spiked by more than 17% in Frankfurt on Friday after the German conglomerate dropped plans to split in two.
Thyssenkrupp said it would abandon the planned separation after discussions with the European Commission made clear that the German company would not be allowed to spin off its steel business into a joint venture with India’s Tata Steel.
“The economic downturn and its effects on business development and the current capital market environment have led to the separation not being able to be realized as planned,” the company said in a statement.
Instead, Thyssenkrupp said it would seek to slim down its structure and strengthen its capital base. It also plans to spin off its elevator business.
Even with the big jump posted on Friday, Thyssenkrupp shares are still down 11% this year.
It may seem tempting to buy Uber (UBER) today. But take one look at rival Lyft (LYFT) and you’ll see why that may not be a great idea.
Lyft is now trading about 25% below its IPO price because of concerns about how much money it is losing, competition with Uber and underwhelming results in its first earnings report since going public.
Average investors should watch and wait when it comes to a buzzy IPO instead of diving on the first few days, recommends Jim Price, lecturer and entrepreneur in residence at the University of Michigan Ross’ Zell Lurie Institute. Price’s advice:
He’s referring to the large mutual funds and hedge funds that are able to buy in to an IPO at the offering price.
Chinese stocks closed higher today, seemingly shrugging off worries over this week’s trade escalation between Washington and Beijing.
But resilience may not be the explanation.
State-backed investment funds were buying Chinese stocks, propping up the market, according to a Bloomberg report.
On Monday, the Shanghai Composite dropped 5.6%, its biggest one-day drop since February 2016. It closed up 3.1% today, having dropped 4.5% this week.
Last night, the US hiked tariffs from 10% to 25% on $200 billion worth of Chinese exports.
CNN Business’ Paul R. La Monica is spending the morning at the New York Stock Exchange ahead of Uber’s debut. Some scenes from the ground:
The biggest question I am getting this morning is “Why aren’t global stock markets in free fall” now that the United States has made good on its tariff threat?
It’s a good question. These next days are crucial. The benchmark Standard and Poor’s 500 has been down four days in a row and futures are indicated lower again today, but the index is still relatively close to record highs.
Markets are still hoping for a resolution and seem to believe the president has a lot more leverage to get the Chinese back to their earlier promises.
That leverage: even more Chinese goods to tax. The president Thursday and again this morning said the “paperwork” has begun to slap 25% tariffs on another $325 billion in Chinese goods.
But I would call market stability here tenuous. Talks begin again at 9 am in Washington and it is unclear whether either side will budge. And the president is tweeting this morning his support for tariffs over a trade deal. Unclear if that is a negotiating ploy, or he is paving the way for the reality after talks break down for good.
It’s happening. The trade war between the world’s two largest economies is escalating again, after the US hit China with higher tariffs and Beijing pledged to retaliate.
The Trump administration raised tariffs on $200 billion worth of Chinese imports from 10% to 25% at 12:01 a.m. ET Friday.
Investors have been preoccupied with the trade fight all week, though the immediate market reaction was mixed.
All eyes will be on Washington as day two of trade talks with Beijing unfolds, and investors try to determine the path forward.
The first day of discussions did little to settle markets. The Dow closed down 0.5% on Thursday. The S&P 500 shed 0.3%, and the Nasdaq declined 0.4%.
Trade could take some attention off of Uber’s Wall Street debut, billed as the year’s most-hyped IPO.
The company will start trading on the New York Stock Exchange today with the ticker UBER.
The company priced its IPO at $45 a share yesterday. That’s at the low end of its original proposed price range of between $44 and $50 a share.
Still, the company will raise $8.1 billion and will rank among the largest US public offerings ever.
Uber has a tough road ahead. It needs to prove that it won’t go the same way as competitor Lyft (LYFT), whose shares have plummeted since its own IPO in late March.
