The ride-hailing company Uber is making its stock market debut on Friday, with shares priced at $45, the lower end of the possible range,…
The ride-hailing company Uber is making its stock market debut on Friday, with shares priced at $45, the lower end of the possible range, and a total market value ofabout $82 billion.
That’s a relatively conservative approach for this initial public offering. A few months ago, analysts were expecting Uber’s IPO to be far bigger than this. A $100 billion valuation was seen as reasonable — some even floated $120 billion.
But it’s a rough week for the stock market, which is watching President Trump’s rhetoric on trade with concern. And Uber’s smaller ride-hailing rival Lyft saw its stock values plummet after an ambitiously priced IPO last month.
Still, this is the largest U. S. initial public offering since Alibaba’s record-setting IPO in 2014.
Uber, which has never turned a profit, expects to raise $8.1 billion in the IPO.
Uber has expanded dramatically since its founding a decade ago — in user base, in geographic scope and in ambition. Once focused on helping wealthy users hail private limos as an alternative to taxis, Uber embraced a peer-to-peer model where almost anyone could become a driver. Like Lyft, it began offering carpooling options where you share a ride with a stranger.
As Lyft focused on ride-hailing in the U. S., Uber took another path — expanding its global footprint and diversifying its services, offering food delivery, freight shipping and electric bike rentals.
But all that growth was expensive. Uber, like Lyft, has never made a profit. Instead, the company has burned through prodigious quantities of venture capital as it slashes prices to compete with rivals and invests any earnings into expansion.
Plenty of investors see big profits in Uber’s future — in the long term. These profits depend on Uber outlasting rivals, raising rates and cutting costs. Investors point to the company’s massive size, and the tremendous potential markets for its many services: ordering takeout, receiving packages, even getting groceries delivered.
