SAN FRANCISCO (Reuters) – Uber Technologies Inc. ‘ s (the UBER.The stock has fallen 3% to an all-time low in the busiest trading session since the trip from a company’s Wall Street debut, as the employees and early investors on Wednesday, it was free to sell their shares.
FILE PHOTO: the Uber logo is displayed on a mobile phone in London, england, on September 14, 2018. (REUTERS photo/Hannah Mckay
More than 110 million shares, valued at approximately $3 billion, it was traded at mid-day, is second only to the 186 million shares are exchanged in Uber’s first session on the stock exchange on the 10th of May.
The majority of the Uber 1.7 billion of outstanding shares were restricted from trading until Wednesday as a so-called lock-up period is designed to prevent an avalanche of sales for the new public company will be able to have undermined the share price.
In the end the Uber at the top comes at a time of increasing reluctance on Wall Street to make risky bets on a host of money-losing heavy-metal start-ups, which greatly facilitated the public offerings of the year.
Wednesday’s loss, Uber has fallen by more than 40% since its initial public offering of the company, which is a net loss of $1.2 billion in the September quarter, with the battle in order to win the trust and confidence of the investment community.
At the time of the IPO filing, Uber said that about 76% of the voting shares are held by insiders, venture capitalists, and other investors have to face in prison.
Uber’s stock tumbled 14 percent since Monday, when the San Francisco-based company also reported increased quarterly loss as it outspent rivals on discounts to lure new customers, by investing heavily in the loss-making new ventures.
“We have some of the sell-off in the last couple of days has been attributed to the fear of additional liquidity in the market and, as a result of the lock-up expiration today, and people were trying to get ahead of that,” said Matt Novak, a managing partner at Blue Capital, which is an Uber investor.
Early investors and employees may be reluctant to sell their shares because the stock has fallen so far.
SoftBank Group Corp (9984.(T), which has billions of dollars are invested into Uber its largest investor in 2017, bought preferred shares at $48.77 per share of the common shares at $32.97 per unit from the existing shareholders, including co-founder Theo Kalanick. Uber shares recently traded at $27.
The Japanese company, which took a beating on its investment in an office-sharing startup WeWork, which earlier on Wednesday reported its first quarterly loss in 14 years, have been injured due to an $8.9 billion hit on the giant’s Vision Fund.
Uber is also Benchmark Capital, Saudi Arabia’s Public investment fund, and the Characters (GOOGL.And Goldman Sachs was among the top investors.
In September, WeWork scuttled his much-anticipated market debut by the end on the business model, corporate governance, and is thriving to lose. This development has led to an increased reluctance by many investors to own a money-losing companies trading at high multiples.
Non-profit making US companies with the initial public Offering of this year will have an average stock rate of return of 0%, compared with an average increase of 3% for profitable companies that have held Ipos, according to a Reuters analysis. The S&P 500 is up 22% in 2019, after the close of a record high on Monday.
Longbow Asset Management in the last couple of days has started to buy shares in Uber, its smaller rival, Lyft (LYFT.(O) a social media site like Pinterest (pin down.And the online pet shop is Tough (CHWY.(N) said Jake Dollarhide, chief executive of investment-advisory firm in Tulsa, Oklahoma, usa.
Lyft declined to 41% in the March IPO, and Pinterest is down 44% from the high in August, after its April deal. To be tough has increased by 70% in three sessions after its debut, but since then it has steadily declined and is now only 6% of the initial public offering price.
“I wasn’t interested in a lot of these companies in the IPO pricing, but now that they’re down to 30 or 40 per cent., and they are very interesting to me,” Dollarhide said. “I’ve been in the business of buying, when things look bleak.”
Reporting by Supantha Mukherjee in Bengaluru and Noel Randewich in San Francisco; Editing by Giles Elgood