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Even we have seen that coming. And now it's here:
Uber began trading Friday on the New York Stock Exchange at $ 42 per share.
Uber set the price of its shares at $ 45 Thursday night, which put them in the low end of its target of $ 44 to $ 50 per share. This gave Uber a $ 75.46 billion valuation on its IPO on an undiluted basis, well below the $ 120 billion sought at the very beginning of its first announcement.
When your financial situation is only viable if you look through the pinkest glasses, it's not the best idea to enter the public market the same week that your nearest competitor published his first report on President benefits passive-aggressive tweets that he has essentially started a trade war with China.
And yet, Uber did it.
We all went to bed thinking that Uber had set his IPO at the bottom of his range, so that he could go from $ 45 a share to $ 50. Then we all spent the morning watching the market decide that even the low end was a bit high for a company that does not seem interested in making a profit. And watching the introductory price go down by $ 3 in minutes was logical since Uber is looking to raise capital at the end of a week in which the S & P has lost more than 70 points.
Everything seems terribly logical.
Even though it's fearing for Uber, we can not help but see this as a positive development. We were emotionally reduced to looking at the market through the prism of a nurse working in psychiatry. Trump's meaningless tweets about China have been treated as real data to the point that they have become real data. Some positive macroeconomic reports do not overcome any piece of negative macroeconomic data and the highlight of this month has been the flotation of fake meat. Watching the market take a sort of virtual pass for Uber leaves us a glimmer of hope that the logic is not totally destroyed in finance.
We fully expect Uber to fall into a range of algorithms that are waiting to claim that it is undervalued and that robots are starting to buy. Once that happens (we guess it will rise to around $ 39 a share), Uber will be nonsense again. But at least we get a healthy cynicism from the start, which gives Uber a useful lesson on how the actual dynamic pricing really works.
Uber suffers the punishment of a market that has finally regained its sanity and has only engaged in a trade war between the two largest economies in the world.
Enjoy the weekend!
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