The chief executive of Uber has urged employees to ignore “pessimistic voices” after shares in the company slumped again on their second day of trading since Friday’s disappointing stock market debut.
With Wall Street in a fragile state after the re-emergence of trade tension between the US and China, Uber’s stock market value fell below $63bn (£49bn), just over half the $120bn that its investment bankers advised it could be worth last year.
After setting a target price of $45 when it floated, Uber’s shares closed at $41.51 on Friday and continued their downward spiral on Monday, falling more than 10% to just above $37.
Uber’s poor start to life as a listed company prompted an email from the chief executive, Dara Khosrowshahi, to the San Francisco-based firm’s 22,000 staff, according to US news outlet CNBC.
“There are many versions of our future that are highly profitable and valuable, and there are of course some that are less so,” he wrote. “During times of negative market sentiment, the pessimistic voices get louder, and the optimistic voices pull back.”
Dara email to $UBER employees today:
“There are many versions of our future that are highly profitable and valuable, and there are of course some that are less so. During times of negative market sentiment, the pessimistic voices get louder, and the optimistic voices pull back”
May 13, 2019
“Remember that the Facebook and Amazon post-IPO trading was incredibly difficult for those companies. And look at how they have delivered since. Our road will be the same.”
Wall Street as a whole was down as investors took fright after China hit back at the US with further import tariffs in the latest trade spat between the world’s two biggest economies.
In float plans released earlier this year, Uber said it could be worth $100bn but, with markets in a parlous state, it eventually opted for a float price that valued it at $80bn. Monday’s fresh falls trimmed it to just above $63bn.
The performance of ride sharing app rival Lyft’s shares has also been lacklustre since its recent stock market debut. Lyft was down nearly 6% on Monday at just over $48.
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Neil Wilson, the chief market analyst at Markets.com, said: “Uber also is slumping hard. The company has come to market at a very, very tough time. The questions over its profitability remain and now it’s going to be under pressure to deliver sooner than it would have done had the shares really popped. It looks like the market just wasn’t ready for these mega loss-making ride-hailing firms.”
However, despite its poor trading debut, Uber raised $8.1bn and its float was one of the biggest in US history – and the most eagerly awaited technology IPO since Facebook hit the market in 2012.
Uber has never made a profit – last year it made an operating loss of $3bn – and warned in its investment prospectus for the stock market flotation that it may never break even.