On May 13, 2019, Uber stock hasn’t seen any improvements. It’s still falling and tumbled 11% toward fresh lows. The volume is at 66 million shares, making it the most actively traded stock on the New York Stock Exchange. The drop also occurred in the broader stock market. The Dow Jones Industrial Average is over 550 points, and the S&P 500 index falls over 2% approximately.
Be More Patient
Despite Uber’s catastrophic fall, the investors say that you should be more patient. Just a few days ago, uber stock was at $42, 6.7% below the $45 IPO price, then fell to $41.57, which is 7.6% below the IPO price. It’s rival Lyft Inc. went public on March 29, 2019, and although they’ve beaten Uber, they also didn’t fare too well.
To be precise, Lyft’s stock fell 5% and on May 13, 2019, it’s about 33% below the IPO price of $72. Definitely not an impressive result.
Investors and Investment
What do investors say? Well, to be more patient. The Uber’s debut wasn’t as successful as many expected but the company is already working their way up. They continued the investments in order to expand its market share, which in their words, should make the company long-term competitive.
A Future Uncertain
The valuation digestion process of both Lyft and Uber is going to take quite a lot of time. As the analyst, Dan Ives said, this is because of the ability to execute the strategic vision around Uber depends on the total addressable market. This isn’t going to be an overnight success story, in his words.
The aftermath is that Uber probably won’t be profitable for the next three or four years. During this time, the company will probably continue to invest in order to stay afloat in the ever-growing market. They have approximately $1.2 trillion in the ride-sharing market in the US and $5.7 trillion in the market globally. This should help Uber reduce the non-profitable period to some extent. Source: marketwatch