Uber slides at open following last week's rocky debut

Uber slides at open following last week's rocky debut

Uber slides at open following last week's rocky debut

On Friday, it took a $617 million hit - the largest loss on the first day of trading by a USA -based company in recent history, according to Renaissance Capital.

Among the recent big investors - and perhaps losers - is PayPal, which had disclosed plans to buy $500 million in Uber stock at the IPO price of $45. Even at the low end of the price range, Uber's listing was the ninth-largest U.S. IPO of all time and the biggest on a U.S. exchange since Alibaba Group Holding Ltd.'s US$25 billion global record-holder in 2014, according to data compiled by Bloomberg.

Wedbush analyst Ygal Arounian said investors need to be patient as Uber reaches full monetization potential with its ride-sharing platform and a broader growth engine with Uber Eats, Uber Freight and autonomous driving initiatives.

"If the stock falls another 10%, you can see investors sharpen their pencils on valuation and see a rally", Ives explained.

"While it might be easy to call out "market conditions" for these failings", wrote Nicholas Colas, a co-founder of DataTrek Research, in a message to clients on Monday about the decline in Uber and Lyft stocks, "the unvarnished truth is that these declines represent a fundamental disconnect between public and private valuations". Concerns continue to mount on Uber's ability to sustain its independent contractor model for its drivers.

Uber's epic drop is also bad news for some of the top investors who bought stakes in the company relatively late in the game.

The company tried to ease the market's anxiety by claiming that $894 million of the loss may have been attributed to factors related to its IPO - things like stock-based compensation packages and taxes. Throughout that first day of trading, it didn't get much better.

"We are not anxious the stock is turbulent today on its first day of pricing and we continue to believe on a sum of the parts valuation this stock is worth a $100 billion+ and we would be buyers here despite the choppy tech tape and general market worries", Ives says.

Uber's dismal reception raises questions about how the market will value WeWork, Slack and numerous other "unicorns" hoping to go public in the weeks and months to come.

Ives believes that Uber is not unlike Amazon or Facebook - a true number one player in an industry it's pioneering.

Motorists who rent a vehicle through Lyft can book it for anywhere between one day and two weeks.

That's not exactly cheap, but the trade-off is that motorists can claim a $20 credit to catch a ride to the company's rental lot in San Francisco's Mission District.

Lyft posted a $1.1 billion quarterly loss last week and forecast losses would peak this year as it controlled expenses and got more revenue from each customer.

Uber's rival Lyft saw its shares soar on their first day of trading in March, before the value of the company began to sink.

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