Yesterday, Uber (UBER) co-founder Travis Kalanick sold about 20 million UBER shares, raking in over half a billion dollars. The shares sold for $26.65–$27.40. In spite of the massive deal, Uber stock closed 0.5% higher yesterday at $27.14. And as of 4:30 AM ET today, Uber stock was up 0.85%. On November 6, Uber’s lockup period ended, taking the stock down 3.9%. Kalanick, who now holds more than 75 million Uber shares valued at around $2 billion in total, is still an Uber board member.
Uber’s third-quarter earnings results, released November 4, were better than expected. However, on November 5, Uber stock fell 9.8%. In comparison, rival Lyft (LYFT) fell 3.4% on November 5 but offset the loss the next day with a 3.8% gain.
Monetization of Uber stock may help Kalanick’s new venture
Monetizing Uber stock may help capitalize Kalanick’s new venture, CloudKitchens. The venture, which provides shared kitchens for delivery-focused restaurants, raised $400 million from Saudi Arabia’s public investment fund last week. Interestingly, Uber Eats, Uber’s food delivery business, operates in a similar space. The business was the highlight of Uber’s Q3 earnings results. While the segment’s revenue grew healthily, its EBITDA loss widened to $316 million.
What analysts are saying about Uber stock
Despite Uber’s profitability concerns, Wall Street is largely optimistic about its stock. Of the 37 analysts covering UBER, 23 suggest “buy,” 13 suggest “hold,” and one suggests “sell.” While their median price target has dropped from $50 a month ago to $45, it still implies a healthy 65% upside from UBER’s closing price yesterday.
However, CNBC Mad Money host Jim Cramer isn’t sold on Uber stock yet. Last week, Cramer said that he was “pessimistic” on Uber. He added, “It’s still way too early to go bottom fishing in Uber. The market’s being flooded with supply here.”
While Cramer is negative on Uber stock, he has become bullish on Lyft. In its third quarter, Lyft’s revenue rose 63.36% to $955.6 million, beating analysts’ $915 million estimate. Additionally, its EBITDA loss of $128.1 million beat analysts’ forecast of a $206.3 million loss. Lyft’s net loss was also narrower than expected, at $463.5 million.
BYND struggled with lockup expiration, too
Beyond Meat (BYND), this year’s IPO darling, also faced lockup period expiration woes at the end of October. BYND stock fell 22.2% as fear of competition and the lockup period’s expiration hampered the stock. A leader in the plant-based mean segment, Beyond Meat is facing rising competition from big food producers such as Tyson Foods (TYSN), Kellogg’s (K), and now Unilever.