Lyft hits record low as Uber slumps in Wall Street debut

The world's largest ride-hailing service reached a major milestone Thursday when Uber priced its long-awaited initial public offering at $45 price per share

Uber Technologies Inc. slumped more than 7 per cent in its trading debut after the biggest initial public offering of the year, ending the day below its last private value.

Since 2000, only 18 companies that are valued at over $1 billion opened below their IPO price on the American exchanges. Only about a fifth of IPOs have ended their first day of trading in the red in the last two years, according to Dealogic data.

The company weathered controversies including the unearthing of a culture of sexism and bullying at Uber to a US Department of Justice federal investigation, which culminated in the resignation of co-founder and Chief Executive Travis Kalanick in 2017.

"It's a great moment for the company and all the employees who have been working so hard to get here", Khosrowshahi said in an interview with The Associated Press. 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.

"We were not expecting much of a pop, given the size of the deal" for Uber, Kennedy said.

Uber launched its IPO today on the New York Stock Exchange at the very low end of the price range it was considering, $44 to $50 a share, with an initial price of $45 but it fell nearly immediately to $42 a share.

"I think that it really tainted Uber's IPO". Dara Khosrowshahi, Uber's chief executive officer, said in an interview on the floor of the New York Stock Exchange that trade tensions between the USA and China played a role in the weak performance.

The stock earlier dropped as much as 8.8% to $41.06 as US equities extended losses, with the S&P 500 poised for its biggest weekly drop this year.

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.

Uber's list price gave it a valuation of about $82 billion, making it the largest US -listed IPO since Alibaba Group went public in 2014. The company's performance has been used as a barometer by some to understand how Uber's shares may perform.

As Gizmodo's Brian Merchant writes, driver dissatisfaction is baked into the cake of both Uber and Lyft's business models: "Treating drivers as replaceable, disposable placeholders for algorithms is finally taking its toll". Its total operating losses over the past three years were more than $10 billion, according to filings. But even with Uber's lower share price, its valuation of $76 billion is four times more than Lyft's.

Against the backdrop of a US-China trade spat hitting Wall Street, shares sank below the company's listing price.

Uber sold 180 million shares for US$45 each Thursday, after marketing them for US$44 to US$50 apiece.

There are a few reasons why Uber's shares failed to rise.

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