Recently, the Uber stock dropped almost 25% below the normal Uber IPO price a few days after the IPO. Uber stock has been rallying as timing issues passed and big investors and traders became more interested in Uber growth stocks again.
For many reasons, Uber’s strength in its stock will continue as outlined below.
The Growth of Uber- Uber IPO Price
The Uber IPO might have occurred at a bad time. Most of the big investors were running away from growth stocks amid rising stock trade tensions. The concern of the majority of the investors was that new changes in tariffs for a long time would simultaneously slow America’s economic growth and the constant raising of prices and inflation. Higher prices would no doubt force the Feds to come off the sidelines and hike rates. If the economy is slow but with rising rates, growth in stocks cannot do well.
However, the market has surprisingly moved past most of those issues. The market is still getting a stronger economy with muted inflation. That environment is definitely a dream combination for rapid stock growth. As a result, growth stocks will remain in favor of Uber, and that will help Uber IPO price or Uber stock price to rise.
Employees not Selling Uber Stock
An important factor for the performance of stocks that have gone public recently is insider sentiment. Skeptics usually think that insiders use IPOs to unload shares to public investors. In order for the insiders to be able to sell their shares at their favorable prices. So, insider selling of shares, in turn, puts pressure on stocks, causing them to drop.
Overstated Profitability Concerns
The biggest knock against Uber stock is the quantity of red on the company’s statement. Unfortunately, Uber generates millions and billions of dollars in net losses over a year, and its money burn rate has not really improved a lot. Uber is also facing competition in the ride-sharing market, which ultimately caps how high Uber’s margins will possibly go up.
In a nutshell, the Uber IPO price was apparently a dud thanks to the macroeconomic worries. Those issues have so far disappeared/vanished. At this moment, Uber stock is in its early growth stages of a long uptrend. If you are lucky to buy in the dip of Uber stock, keep it and hold onto it. If you haven’t bought yet, buy Uber in the dip before it is too late.