Uber to give its market value a lift in stock market debut
SAN FRANCISCO (AP) — Uber's next stop is the stock market, where it hopes to pick up more investors willing to bet on a ride-hailing market brimming with potential and conspicuously lacking in profits.
The world's largest ride-hailing service reached a major milestone Thursday when Uber priced its long-awaited initial public offering at $45 price per share to set the stage for its stock to begin trading Friday morning.
The IPO came in at the lower end of Uber's targeted price range of $44 to $50 per share. The caution may have been driven by escalating doubts about the ability of ride-hailing services to make money since Uber's main rival, Lyft, went public six weeks ago.
Even at the tamped-down price, Uber now has a market value of $82 billion — five times more than Lyft's.
No matter how Uber's stock swings Friday, the IPO has to be considered a triumph for the company most closely associated with an industry that has changed the way millions of people get around. That while also transforming the way millions of more people earn a living in the gig economy.
The IPO raised another $8.1 billion for Uber as it tries to fend off Lyft in the U.S. and help cover the cost of giving rides to passengers at unprofitable prices. The San Francisco company already has lost about $9 billion since its inception and acknowledges it could still be years before it turns a profit.
That sobering reality is one reason that Uber fell well short of reaching the $120 billion market value that many observers believed its IPO might attain.
Another factor working against Uber is the cold shoulder investors have been giving Lyft's stock after an initial run-up. Lyft's shares closed Thursday 23% below its April IPO price of $72.
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