Rideshare unicorn Uber doesn’t do anything small. When it was in the game of raising money, it raised close to $US25 billion ($36 billion). When it loses that money — and it does every single quarter — it loses it at astronomical burn rates.
It finally debuted on the New York Stock Exchange today, in the middle of international trade uncertainty and following a massive, international strike by its own drivers. How did it do?
According to University of Florida professor Jay Ritter, Uber’s 7.62 per cent decline since hitting the NYSE makes it “bigger than first day dollar losses of any prior IPO in the US”.
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 US, Ritter told Gizmodo in a phone interview. That single digit decline resulted in an estimated $US617 million ($882 million) paper losses.
Consider also that Uber’s debut valuation of $US76.5 billion ($109 billion) was a considerable drop from the between $US90 billion ($129 billion) and $US120 billion ($172 billion) the company had been worth in some analysts estimation just a month earlier — one meant to stanch the forthcoming bleeding that had begun with competitor Lyft’s bellyflop IPO.
This defensive position did little to keep Uber or its investors from taking on water within a single day of trading.
According to one analyst, the company may be profitable by 2024, though its only real plan so far is to continue to screw workers and eventually replace them with unproven technology. As former CEO Travis Kalanick said in 2014, “the reason that Uber could be expensive is you’re not just paying for the car, you’re paying for the other dude in the car who’s driving.”