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(Bloomberg) – Uber's deadly investors have had the weekend to prepare for what could be a difficult Monday for the markets, in part because the escalation of tariff talks between President Donald Trump and China is about to calm the feeling.
Shares of Uber Technologies Inc. resume trading Monday at 7.6% lower than their offer price after Friday's flop. Among the factors that upset the most important IPO of the year: a massive sell-off in the morning stock market and a poor earnings report published by Lyft Inc., Uber's main rival, Uber
Uber opened at $ 42, or 6.7% less than its IPO price of $ 45. Shortly after, he slipped to $ 41.06. Although the company briefly recovered almost all of its losses in the early afternoon, the return was short-lived.
"While the trade war caused global stock market volatility, we believe that weak Lyft deals were the primary factor impacting Uber," said Kathleen Smith, co-founder of Renaissance Capital and manager of the fund. IPO purse. "Investors are applying Lyft's valuation multiples to Uber. And as Lyft shares fell, Uber did the same. "
Over the past three trading days, Lyft has fallen 13.9%, reaching an all-time low. At the same time, the Renaissance ETF's IPO increased by 0.5%, surpassing the S & P 500's. So, while Uber and Lyft are going through a "difficult price discovery" phase and could continue to do so in the coming days, the rest of the healthy market, says Smith.
In the first hour of the rideshare IPO, retail investors at TD Ameritrade made 1.8 times more transactions than the first two and a half hours of Lyft, according to Alyson Nikulicz of TD Ameritrade . Uber accounted for 10% of Friday's stock trading at 1:28 pm in New York at TD Ameritrade.
Prior to Uber's debut, out of a total of 60 companies, only four IPOs of $ 1 billion or more had dropped at least 5% since the beginning of the decade. Only seven finished the first trading day in the red.
"We think it's a kind of speed bump in the short term – we do not see it as a Lyft 2.0," said Dan Ives, managing director of Wedbush Securities at Bloomberg TV. "It continues to be a story of" show me "."
For the moment, the volatility is at the rendezvous since the traders deport shares and other more risky assets. Trump's weekend back and forth with China suggests that US Treasuries and currencies such as the yen and the Swiss franc will be very active on Monday.
– With the help of Sarah Ponczek.
To contact the reporter on this story: Carolina Wilson in New York at [email protected]
To contact the makers of this story: James Ludden at [email protected], Brad Olesen at [email protected], Matthew G. Miller
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