While both companies are trying to find ways to lower driver costs to become profitable, drivers went on a protest in several US cities earlier this month demanding job security, livable incomes and a cap on the amount ride-hailing companies can collect from fares. 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.
Lyftshares fell six percent to $47.87, and have given back some 30 percent since the company's market debut in late March. Its shares had been priced at $45 each, but closed at $41,57, down about seven per cent. This figure is likely to fluctuate wildly throughout the day as investors assess a flurry of macroeconomic and political risks impacting USA and global equity markets.
Ives says many investors he spoke to were hesitant to buy Uber out of the box given the beating Lyft has taken since its IPO.
"If the stock falls another 10%, you can see investors sharpen their pencils on valuation and see a rally", Ives explained. As they look to lower their driver-related costs, drivers are already expressing major dissatisfaction with the company's cut of their fares to the point where drivers in major markets have loudly protested ahead of both companies' IPOs. Analysts are concerned about Uber's dominance in the global ride-hailing market and its sheer size as a competitive threat.
Uber CEO Dara Khosrowshahi arrives at the New York Stock Exchange for his company's initial public offering, Friday, May 10, 2019.
Moreover, he compared Uber's IPO to those of Amazon and Facebook. It's unlikely this influential crowd will shift their views due to what may be a sluggish first few days of trading. Uber retaliated by ceasing to hire new drivers.
"We are not anxious the stock is turbulent today on its first day of pricing and we continue to believe on a sum of the parts valuation this stock is worth a $100 billion+ and we would be buyers here despite the choppy tech tape and general market worries", Ives says. Uber was hoping to launch higher and stay up, but so far that's not happening.
Day One doesn't necessarily determine the fate of a stock, of course.
Others on the Street are unsure.
The rating set for Lyft by this Wall Street analyst is "outperform" for the future forecast. Marty Wolf, president of investing firm, MartinWolf, said that Uber's share price hard could cause trouble for WeWork, the office sharing space company and its plans to go public.
"You can't pick when you go public", Khosrowshahi said.
Gunmen storm five-star hotel in Gwadar
Balochistan , home to a long-running insurgency, is Pakistan's poorest and least developed province. Heavy contingents of police and security forces soon reached the area and started an operation.