6 ms·

Uber Is the Worst Performing IPO in History

19 points by mises 7y ago

blakesterz 7y ago
But the body of the article makes it seem different... "In terms of percentage losses, Uber’s dip doesn’t even scratch the surface of the worst IPOs. But the staggering valuation of the company makes it, in raw scale, “among the top 10 IPOs ever” including companies outside the U.S., Ritter told Gizmodo in a phone interview. That single digit decline resulted in an estimated $617 million paper losses."
- rossdavidh 7y ago
  But, this was after they had dropped their initial valuation: "Consider also that Uber’s debut valuation of $76.5 billion was a considerable drop from the between $90 billion and $120 billion the company had been worth in some analysts estimation just a month earlier..." So, it seems like they knew it was going to be bad, and dropped their target (by tens of billions of dollars), and it was still not good.
- mises 7y ago
  I still think it's somewhat relevant. Companies of that size are generally supposed to be more stable, and aren't really supposed to slip that much. This is especially true in light of the fact that Uber already priced near the bottom of the range for IPO price to prevent exactly this issue.
crazygringo 7y ago
Just because it's one of the biggest, so in absolute terms. What actually matters: "In terms of percentage losses, Uber’s dip doesn’t even scratch the surface of the worst IPOs."
DevX101 7y ago
I've really never liked the way the financial press writes about IPOs. The success of an IPO process should be judged on the degree to which the underwriters were able to accurately price the stock. The best IPO in my mind is one in which the price doesn't change at all on IPO day. That is, both the company and the IPO investors agreed on a fair valuation for the company and they were both right. Zoom's stock which shot up 70% in my mind was a horrible IPO. Either the underwriters undervalued the company, or the investors are paying too much for an asset that's worth less. Seen in this context, User's 7.6% drop on IPO day is not bad, and better than most.
- c256 7y ago
  I see what you’re going for, but do you really think anyone’s goal was to price the stock so that the price stayed flat? In the one IPO that I saw from the inside (early in the internet bubble days), the financial people seemed to be debating what sort of first-day growth they were after, and I don’t recall anyone suggesting targets like that. Maybe strategies have changed since then?
- rossdavidh 7y ago
  Well, that 7.6% drop was after they dropped their target well below what had been expected earlier. So perhaps they semi-accurately gauged the market price for their stock, but that means lots of people had been way too optimistic about it previously. Also, the fact that the IPO did not provide a big profit for the initial buyers (not quickly, anyway), and you could get a better price by purchasing it on day two than by being in on the IPO, certainly has the potential to impact IPO's coming up.
gremlinsinc 7y ago
I don't get how Uber gets so much money thrown at it, when it has not proven ANY business fundamentals. Sure people use the service, and like the service, but when the service is essentially a perpetual loss-leader what's the point? Self-driving cars could be 5 years away, or it could be 20. I remember google saying they'd be on the road and ready for prime-time use by 2017, well that's come and gone. Fact is the entire game will shift when they do hit the market, manufacturers would be STUPID not to make subscription plans where you don't 'own' a car, but you pay $500-1000/month (includes insurance/gas/etc...) for a car to pick you up, take you where you need to go, then when it's not working for you - it's working for someone else nearby (cutting down on congestion at the same time). When all the car manufacturers are their own uber, where does that leave uber?
- stephenr 7y ago
  > When all the car manufacturers are their own uber, where does that leave uber? Looking for more laws to break I guess?
  - gremlinsinc 7y ago
    like ponzi scheme? Cause I feel that's all it really is at this point lol

19 points by mises 7y ago

But the body of the article makes it seem different... "In terms of percentage losses, Uber’s dip doesn’t even scratch the surface of the worst IPOs. But the staggering valuation of the company makes it, in raw scale, “among the top 10 IPOs ever” including companies outside the U.S., Ritter told Gizmodo in a phone interview. That single digit decline resulted in an estimated $617 million paper losses."

rossdavidh 7y ago
But, this was after they had dropped their initial valuation: "Consider also that Uber’s debut valuation of $76.5 billion was a considerable drop from the between $90 billion and $120 billion the company had been worth in some analysts estimation just a month earlier..." So, it seems like they knew it was going to be bad, and dropped their target (by tens of billions of dollars), and it was still not good.
mises 7y ago
I still think it's somewhat relevant. Companies of that size are generally supposed to be more stable, and aren't really supposed to slip that much. This is especially true in light of the fact that Uber already priced near the bottom of the range for IPO price to prevent exactly this issue.

crazygringo 7y ago

Just because it's one of the biggest, so in absolute terms. What actually matters: "In terms of percentage losses, Uber’s dip doesn’t even scratch the surface of the worst IPOs."

DevX101 7y ago

I've really never liked the way the financial press writes about IPOs. The success of an IPO process should be judged on the degree to which the underwriters were able to accurately price the stock. The best IPO in my mind is one in which the price doesn't change at all on IPO day. That is, both the company and the IPO investors agreed on a fair valuation for the company and they were both right. Zoom's stock which shot up 70% in my mind was a horrible IPO. Either the underwriters undervalued the company, or the investors are paying too much for an asset that's worth less. Seen in this context, User's 7.6% drop on IPO day is not bad, and better than most.

c256 7y ago
I see what you’re going for, but do you really think anyone’s goal was to price the stock so that the price stayed flat? In the one IPO that I saw from the inside (early in the internet bubble days), the financial people seemed to be debating what sort of first-day growth they were after, and I don’t recall anyone suggesting targets like that. Maybe strategies have changed since then?
rossdavidh 7y ago
Well, that 7.6% drop was after they dropped their target well below what had been expected earlier. So perhaps they semi-accurately gauged the market price for their stock, but that means lots of people had been way too optimistic about it previously. Also, the fact that the IPO did not provide a big profit for the initial buyers (not quickly, anyway), and you could get a better price by purchasing it on day two than by being in on the IPO, certainly has the potential to impact IPO's coming up.

gremlinsinc 7y ago

I don't get how Uber gets so much money thrown at it, when it has not proven ANY business fundamentals. Sure people use the service, and like the service, but when the service is essentially a perpetual loss-leader what's the point? Self-driving cars could be 5 years away, or it could be 20. I remember google saying they'd be on the road and ready for prime-time use by 2017, well that's come and gone. Fact is the entire game will shift when they do hit the market, manufacturers would be STUPID not to make subscription plans where you don't 'own' a car, but you pay $500-1000/month (includes insurance/gas/etc...) for a car to pick you up, take you where you need to go, then when it's not working for you - it's working for someone else nearby (cutting down on congestion at the same time). When all the car manufacturers are their own uber, where does that leave uber?

stephenr 7y ago
> When all the car manufacturers are their own uber, where does that leave uber? Looking for more laws to break I guess?
- gremlinsinc 7y ago
  like ponzi scheme? Cause I feel that's all it really is at this point lol