Uber debuts on Wall Street

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But even that was not enough to guarantee a solid debut on Wall Street.

In an astonishing twist of events, Uber began trading at $ 42 on Friday, below the price of its $ 45 IPO. The beginnings occur after Uber has collected $ 8.1 billion one of the most important public offers ever made, valuing the company at $ 82 billion, but nevertheless at the low end from what Uber originally intended to raise.

The less than stellar supply might well be only the first awakening Uber faces when transitioning to the public market. Over the past decade, Uber has emerged as a spokesperson for a whole generation of tech startups who have collected – and lost – unprecedented amounts of money, while avoiding becoming public as long as possible. But that can not fly to Wall Street.

Lyft (LYFT)Uber's main rival in the United States, since its publication at the end of March, is stagnant on the stock market. Lyft's shares fell below the IPO price on the second trading day and have continued to fall since then. The stock is now down about 25% from the IPO price.
Uber logos occupy a prominent place on the floor of the New York Stock Exchange on Friday.
Like Lyft, Uber has a habit of wasting money by subsidizing the cost of trips and investing in a growing number of transportation options. Uber lost $ 1.8 billion in 2018, more than any other US startup has ever lost in the year prior to its IPO. The previous company to hold this dubious honor, but briefly: Lyft.

"It's amazing what [Uber has] built, but they are still not made to do it. They subsidized the company, "said Kathleen Smith, principal director of Renaissance Capital, which manages IPO-traded exchange-traded funds. "The boat does not float on its own bottom."

As Smith points out, technology companies that have seen huge losses in recent years in the market, including Lyft and Snap, are not "currently trading above their IPO price."

Uber, for its part, is presented as an "Amazon for transport" insofar as it offers a wide range of services, including meal delivery and freight transport. But the comparison with Amazon can also be read as a clear signal to investors. Amazon lost money for years while investing in building a big company. Now he makes billions of profits each quarter.

The long and bumpy road of Uber

Uber was launched in 2009 with the aim of offering private cars on demand simply by opening an app on your smartphone. Over the next decade, he destroyed rivals because of his aggressive fundraising, unfair maneuvering and unconditional attitude to expansion in the United States and abroad.

Along the way, Uber has destabilized the taxi industry and has become the most valuable American start-up. He became the darling of Silicon Valley and created an entire category of businesses posing as the "Uber for X".

The first investors of Uber reveal their crazy adventure
But that changed in 2017, when ex-engineer Susan Fowler rocked the company by posting allegations of sexism and harassment in a long blog post. An internal investigation revealed an imprudent desk culture in which "step by step" was valuable and leaders had uncontrolled power. Travis Kalanick, co-founder and then CEO of Uber, admitted that he had to "grow up" after being filmed arguing with an Uber driver.
Kalanick was eventually removed from office in June 2017. At that time, Uber was operating without a CEO, CFO, COO or marketing director.
Uber replaced the impetuous Kalanick by Dara Khosrowshahi, a seasoned executive who led Expedia (EXPE) previously. Khosrowshahi quickly pointed out that Uber had to change. "What brought us here is not what will bring us to the next level," he said.
Since then, he has reorganized the company's cultural norms, which now include maxims such as "We Act Right," in stark contrast to Kalanick's "Always Be Hustlin" edict. He hired key executives, including a CFO after three years without. And he put an end to some exceptional crises, including a major litigation with Google's autonomous car unit, Waymo, over the alleged theft of trade secrets.

Under Khosrowshahi, Uber also reconsidered his efforts to operate worldwide. "One of the potential dangers of our overall strategy is that we are fighting too many battles on too many fronts and with too many competitors," he said last year.

A bad week to make public

After this crazy race to reorganize his business and become public, Uber has come across a different problem: the week of hell.

On Sunday, President Trump surprised investors by threatening to impose higher tariffs on China in a tweet. The market has fluctuated wildly with concerns over the intensification of the trade war between the United States and China.

On Tuesday, Lyft released its first earnings report since its IPO, revealing losses of more than $ 1 billion in the first three months of this year. Lyft's stock continued to decline the next day.

Carpool drivers for Uber and Lyft are holding a strike and protesting at LAX International Airport against what they say are unfair wages in Los Angeles, California on May 8, 2019.

At one point, Uber is rooted for Lyft to fail. But as Uber's closest proxy in the public market, the decline in Lyft's shares has only made Uber's IPO transaction even more difficult.

Wedbush analyst Daniel Ives said in a note to investors this week that Lyft's stock market performance, combined with greater market turmoil, would likely "have led Uber to consider a more conservative price range based on its demand. IPO ".

And as if that was not enough, pilots Uber and Lyft staged strikes in many cities Wednesday before the IPO. Drivers are looking for sustainable earnings and job security at a time when Uber will likely only face increased pressure from investors to find a way to move towards profitability.

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