On May 10, Uber Technologies (UBER) is set to make its debut as a public company under the symbol “UBER” on the NYSE (SPY). On May 9, the company priced its IPO at $45.00 per share—near the lower level of its expected price range of $44.00–$50.00 per share. With the oversubscribed IPO, Uber offered 180 million shares of its common stock. The company gave a 30-day option to buy up to 27 million shares.
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Uber versus Lyft
Uber’s direct rival Lyft (LYFT) started trading on NASDAQ on March 29 with an IPO priced at $72.00 per share. While Lyft and Uber filed for their respective public offerings nearly at the same time with a gap of about one week in December 2018, Lyft made it to the exchange first.
Lyft priced its IPO aggressively on the top end of its expected range. The company has seen steep losses since its listing on the exchange. Lyft’s bad luck in the market could be one of the reasons why Uber priced its IPO conservatively.
A few days before Lyft started trading, the company increased its expected IPO price range to $70–$72 from $62–$68. On the first trading day, the company posted an all-time high of $88.60. However, Lyft has lost nearly 37.7% since then as of the closing on May 9.
Despite Lyft’s bad luck, investors who have subscribed to Uber’s IPO still expect it to perform well. However, the company might have to face initial difficulties. The ongoing broader market sell-off might hurt Uber stock.
As of May 9, the S&P 500 Index, the NASDAQ Composite Index, and the Dow Jones Industrial Average have lost ~2.5%, 3.1%, and 2.6%, respectively, this week due to renewed US-China trade tensions. As a result, the SPDR S&P 500 ETF and the Invesco QQQ Trust (QQQ) have lost ~2.5% and 3.3%, respectively, week-to-date.