- Dara Khosrowshahi Has Already Succeeded As Uber CEO
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- Uber's $100 Billion IPO Is The Final Symptom Of A Very Dumb And Very Fatal Disease
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- UBER’s IPO Disaster!
- Uber ipo will be a disaster
- This is going to be the granddaddy of all tech IPO disasters.
- Let’s face it, the Uber IPO was a disaster – Stuff.co.nz
ANALYSIS: A few years ago, technical stocks were hot property.
New listings will land on Wall Street, investors will be very excited and the market will run the original public offer through the roof.
This definitely did not happen with Uber's first price development a few days ago.
Dara Khosrowshahi Has Already Succeeded As Uber CEO
Uber's original public offer (IPO) was a car accident. It is potentially terrible news for Uber because it suggests that investors do not trust the app-based taxi company to defend or build on its position in the market.
And this somehow seems to be a surprise to Uber.
* Uber's catastrophic record – Worst dollar loss ever for a US IPO's first day
* Uber trades under last private value in rocky post-IPO start
* Uber does his workers millionaires as it prizes IPO at US $ 45 per share
* The great Uber strike: drivers make their claims known
We know this because Uber chief Dara Khosrowshahi said it himself in a note he wrote to his staff on Monday.
"Of course, our stock did not trade as well as we had hoped for the IPO."
And that puts it mildly. Calling it a "disaster" would be more accurate. Ubers US $ 45 (NZ $ 68.80), a share price, fell 7.6 percent on its first trading day and tumbled an additional 11 percent the following day, ending at $ 37.10 per share.
How did this happen? Well, there are two main schools in mind here.
Optimists will point to similar turbulent patterns tech firms have experienced in the weeks that followed their IPO.
Facebook's IPO, for example, was $ 29.60 when it went public in May 2012. It then experienced an upward trend of $ 31.09 in the following month before crashing at a price of US $ 18.05.
Facebook's stock was priced at $ 193.40 just last month, only US92 cents short of its record price. So a clear success.
At the other end of the scale you have technology companies like Snapchat.
Its stock market listing of $ 27.09 fell to US $ 19.54 over the first two months and continued to decline. Snapchat's share price reached a record low of $ 4.99 in December 2018 and is now trading around USD 10.
So how does the future look to Uber?
Uber's $100 Billion IPO Is The Final Symptom Of A Very Dumb And Very Fatal Disease
Now that Uber has become public, it has an extra responsibility for the shareholders. This means that it is a company that sooner or later has to return a profit to pay its shareholders dividends. It's the name of the game.
Let me start with (a little) good news. Uber released its IPO at a bad time. Market confidence in tech stocks is not what it was a few years ago.
It can be argued that market confidence has pushed Uber's price lower than what it really is worth.
but I do not buy it. We're definitely not in a bear market, and investors will snap up a good deal when it comes. Technical stock or otherwise.
And Uber's operational loss of $ 3b last year suggests that this nine-year-old company simply doesn't represent the good with an investment opportunity.
But I'm a technological journalist, not Warren Buffet.
Finally, the long-term performance of Uber's warehouse should not be drastically affected by the early performance of Wall Street.
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Is Uber likely to return a profit in the future?
Is the position in the market sound?
Both of these points are definitely up for debate.
Uber's famous owner does not own large assets. It's software and industry reputation is 100 percent of the company.
UBER’s IPO Disaster!
Drivers are not employees and can stop working for Uber anytime.
And the sharks are already circling. Lyft and Ola are two apps that offer mostly the same service. If their market share is growing and they offer self-service drivers a big cut in prices, it's hard to see how Uber can defend its position without taking a smaller cut in prices (currently 20 percent).
Uber ipo will be a disaster
More worrying about Uber, it's also the very real possibility that drivers can unite, or form a collaborative effort and launch a driver-owned rival to Uber.
Gig economy programs run by the workers themselves are already happening.
Look up and go, for example. This is an app owned and operated by house cleaning staff in New York.
The benefits are easy to see. Only 5 percent of the fees go to Up & Go and it is only used for software maintenance and development.
This is going to be the granddaddy of all tech IPO disasters.
The rest goes to the worker. Creates an obvious appeal for both the worker and community-focused users.
Who should be all.
Up and go as other benefits as well.
Let’s face it, the Uber IPO was a disaster – Stuff.co.nz
Its workers are all professionals who are peer-selected through reference controls, interviews, and litigation.
If this model was adopted by the taxi drivers worldwide, it would be difficult for Uber to compete.
Most of us would prefer locally spent money to actually remain local.
And an on-demand app service that only takes 5 percent cuts (for maintenance costs), compared to a faceless Silicon Valley app that takes 20 percent cuts, has obvious competitive and emotional benefits.