On Monday, shares of Uber Technologies, Inc. (NYSE: UBER) fell 10.75 percent to close at $37.10 in its first full day of trading on the New York Stock Exchange. The stock is now down roughly 18 percent from Friday’s initial public offering price of $45 a share. PayPal was amongst the biggest losers from the Uber IPO as it had disclosed plans to purchase $500 million worth of Uber stock at its IPO price of $45 a share.
The ride-hailing company has had little trouble attracting investors in its early rounds of financing, but is now finding it a difficult task convincing Wall Street. Although Uber reported revenues spiked 42 percent to $11.3 billion in fiscal 2018, the company has stated it could be years before it sees a profit.
“It’s clearly a high-risk, high-reward scenario. You’re betting on something that may happen 10 years down the road,” said Matt Kennedy, senior IPO market strategist at Renaissance Capital, a manager of IPO exchange traded funds. “Public investors are looking at profits and not seeing any, and the company’s growth in the last quarter was relatively strong, but I don’t think it blew anyone away.” The company’s main rival Lyft, Inc. (LYFT) shares fell 5.75 percent to close at $48.15 a share, down roughly 33 percent from its IPO price of $72 a share