X

This is not a paywall.

Register for free to continue reading.

We made a promise to you that we’ll never erect a paywall and we intend to keep that promise. We also want to continually improve your reading experience and you can help us do that by registering with us. It’s quick, easy and will cost you nothing.



Nearly there! Create a password to finish up registering with us:


Please enter your password or get a login link if you’ve forgotten


Open Sesame! Thanks for registering.

First Thing, Daily Maverick's flagship newsletter

Join the 230 000 South Africans who read First Thing newsletter.

We'd like our readers to start paying for Daily Maverick

More specifically, we'd like those who can afford to pay to start paying. What it comes down to is whether or not you value Daily Maverick. Think of us in terms of your daily cappuccino from your favourite coffee shop. It costs around R35. That’s R1,050 per month on frothy milk. Don’t get us wrong, we’re almost exclusively fuelled by coffee. BUT maybe R200 of that R1,050 could go to the journalism that’s fighting for the country?

We don’t dictate how much we’d like our readers to contribute. After all, how much you value our work is subjective (and frankly, every amount helps). At R200, you get it back in Uber Eats and ride vouchers every month, but that’s just a suggestion. A little less than a week’s worth of cappuccinos.

We can't survive on hope and our own determination. Our country is going to be considerably worse off if we don’t have a strong, sustainable news media. If you’re rejigging your budgets, and it comes to choosing between frothy milk and Daily Maverick, we hope you might reconsider that cappuccino.

We need your help. And we’re not ashamed to ask for it.

Our mission is to Defend Truth. Join Maverick Insider.

Support Daily Maverick→
Payment options

Uber Shares Are Quickly Approaching ‘White Knuckle’...

Business Maverick

Business Maverick

Uber Shares Are Quickly Approaching ‘White Knuckle’ Territory

A man checks his smartphone while standing among illuminated screens bearing the Uber Technologies Inc. logo in this arranged photograph in London, U.K., on Tuesday, June 26, 2018. Photographer: Chris Ratcliffe/Bloomberg
By Bloomberg
14 May 2019 0

With Uber Technologies Inc.’s shares plunging nearly 20% below its IPO price on Monday, the stock might be fast approaching a “white knuckle” territory, according to one Wall Street analyst.

After closing down 7.6% on Friday in its trading debut, Uber’s stock dropped as much as 13% on Monday in New York, before closing down 11% at $37.10. The initial public offering was priced at $45.

“From a stock perspective, if Uber breaks $35, that is where it starts to get even more white knuckles,” Wedbush analyst Daniel Ives said in a phone interview. “Right now the bears are winning, and there is nothing to stop these stocks from moving down, especially in a risk-off environment,” the analyst added, noting the weakness in ride-sharing peer Lyft Inc., which is also down as much as 7.3%.

Uber shares tumble, fast approach ``white knuckle'' zone

While there are plenty of skeptics when it comes to the ride-hailing and ride-sharing economy, the broader market sell-off amid escalating trade tensions between U.S. and China is also weighing further on the valuation of the two companies. Uber CEO Dara Khosrowshahi told staff on Monday that it was “another tough day in the market,” and warned of a weak showing.

“Uber and Lyft are caught in a perfect storm of China-trade related market choppiness, combined with worries around no profitability in sight, and a valuation knife-fight between the bulls and the bears,” Wedbush’s Ives said, noting that Uber’s IPO was initially expected to be a positive catalyst for Lyft. “Once it ultimately became the opposite, it became a field day for the shorts,” he said.

The staggering proportion of bearish bets in Lyft has already become a cause of concern for investors. The stock currently has nearly 62% of its free float held short, according to S3 Partners.

Falling to $35 would mean a more than 22% discount to Uber’s IPO price of $45. The stock was seeing heavy trading on its second session as a public company. According to Bloomberg data, the total value of Uber shares traded on Monday was $2.8 billion, surpassed only by behemoths such as Apple, Amazon, Microsoft and Facebook.

Gallery

Please peer review 3 community comments before your comment can be posted