He said that if you saw value in Uber at its IPO price of $45 USA, nothing has changed in the last 48 hours. Trade tensions between the USA and China are weighing on investors' minds after President Donald Trump boosted tariffs on $200 billion in goods from China.
"The last US company of this size to IPO was Facebook, for example, and you may remember how that traded initially". While there will be plenty of investors willing to accept short-term losses for long-term gain, Uber and Lyft will have much more competition in the autonomous taxi market than it now has in the ride-share market, including companies like Tesla and Google.
The stock extended losses into the close even as US equities stabilized on renewed optimism that an all-out trade war can be averted, even after the USA decision to slap fresh tariffs on Chinese goods overnight. Although the ride-share app raised $8 billion, experts were disappointed by how low the company priced each share.
As per DealLogic, Uber's weak debut makes it the ninth worst first-day performer of all time with a valuation of $69.71 billion.
Before Uber's debut, only four company IPOs of a billion dollars or more (out of a total of 60) saw their shares tumble at least 5% since the start of the decade. A tense wait for those on the trading floor turned into a jittery start for the newly public company, which touched its intraday high and low prices within 35 minutes of opening.
It took more than two hours for the stock to finally start trading after Uber executives and drivers congregated at the New York Stock Exchange for the bell-ringing ceremony. The trading debut will be closely watched by the cavalcade of other tech startups that are expected to go public this year, including Slack Technologies Inc., Postmates Inc., Peloton Interactive Inc. and Airbnb Inc.
Now a public company, Uber will have to deal with quarterly earnings reports and demands from shareholders to plot a path to profitability. Lyft was down 4 percent, well below its IPO price. Pinterest extended gains to close 53% above its listing price of US$19 a share.
Mostafa Maklad, an Uber driver, told TechCrunch, "Uber, year after year, keeps cutting the rate and how much money they pay drivers..."
Since its foundation in 2009, the company has lost about $9bn.
In its IPO filing in April, the company had warned that it may never make profits as its operating expenses are likely to increase "significantly in the foreseeable future".
"The most important sort of statistic to look at is bookings, because that reflects essentially what people are paying for the service", he said.
Uber's IPO comes against the backdrop of an increase in trade tensions between the United States and China that has weighed on financial markets and increased investor scepticism about its ability to turn profitable soon enough. Nevertheless, the offering values Uber at $82.4 billion - impressive, no doubt, but less than the $100 billion forecast Uber floated to investors this year and far below the $120 billion that some bankers anticipated last year.