After the biggest initial public offering of the year, Uber Technologies ended its first day of trading Friday below its last private valuation. The deflated debut cast a pall over 2019’s prospects as the hottest year for tech listings this decade - and potentially on the future of the ride-hailing industry.
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 shares debuted at $42, well below the IPO price of $45. A tense wait for those gathered on the trading floor turned into a jittery start for the newly public company, which touched its intraday high and low prices within the first hour of opening.
The market has reacted negatively to a shared reality that both Lyft and Uber are struggling with a fundamentally broken business model.
Uber closed at $41.57, giving it a market capitalisation of just $69.7 billion. The San Francisco company last raised private capital from Toyota Motor in August at a valuation of about $76bn.
Dara Khosrowshahi, Uber’s chief executive officer, said in an interview on the floor of the exchange Friday that trade tensions between the US and China played a role in the stock’s weak performance. President Donald Trump had moved overnight to slap fresh tariffs on Chinese goods. “You can’t pick when you go public,” Mr Khosrowshahi said.
But Uber shares extended losses into the close, even as US equities stabilised on renewed optimism that an all-out trade war could be averted. The tumultuous debut makes Uber the newest member of a stock market club no one would choose to join: since the start of the decade, just seven other companies that raised more than $1bn in their IPO have ended the first day of trading in the red.
Uber’s inauguration as a public company was sure to be closely watched by the cavalcade of IPO hopefuls lining up to list in 2019. That crop includes Peloton Interactive, Postmates, Slack Technologies and WeWork, all of which have preparations in progress to go public this year.
Along with Uber, they’ll be following companies like rival Lyft, Pinterest and Beyond Meat to market. Those three offerings provide a few clues for how public market investors are going to treat unprofitable startups with huge private valuations.
Beyond Meat ended the week 165 per cent over its IPO price with a valuation of $4bn. Pinterest extended gains to close 53 per cent above its listing price of $19 a share. Lyft, meanwhile, followed its bigger rival down Friday, almost $21 below where it sold the stock just six weeks ago.
Len Sherman, a professor at Columbia Business School, said that while too much attention is paid to trading on day one, Uber has provided enough financial information in the run-up to the IPO for investors to know what they’re buying into.
“The market has reacted negatively to a shared reality that both Lyft and Uber are struggling with a fundamentally broken business model,” he said. “Uber has lost more money faster than any startup in history, with no clear path to profitability.”
Uber’s losses just last year totaled $3.04bn on an operating basis, with revenue of $11.3bn. Its total operating losses over the past three years were more than $10bn, according to filings.
Mr Khosrowshahi said on Friday that while profitability was a priority for the company, public market investors should be judging Uber by a different metric once it starts reporting quarterly earnings. “The most important sort of statistic to look at is bookings, because that reflects essentially what people are paying for the service,” he said.
In distributing the stock, Uber prioritised shareholders - particularly institutional investors - that it thinks will hold on to the shares for a long time. “We found a set of investors who are long-term oriented, that believe in our vision,” Mr Khosrowshahi said. “Now we have to execute to make sure that the bet that they made on us is a great bet.”
Uber sold 180 million shares for $45 each Thursday, after marketing them for $44 to $50 apiece. Even at the low end of the price range, Uber’s listing was the ninth-largest US IPO of all time and the biggest on a US exchange since Alibaba Group Holding's $25bn global record holder in 2014, according to data compiled by Bloomberg.
A market value of less than $70bn is a considerable climb down from earlier projections: Last year, bankers jockeying to lead the offering told Uber it could be valued at as much as $120bn in an IPO.
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Results
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The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
BMW%20M4%20Competition
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Company profile
Company: Verity
Date started: May 2021
Founders: Kamal Al-Samarrai, Dina Shoman and Omar Al Sharif
Based: Dubai
Sector: FinTech
Size: four team members
Stage: Intially bootstrapped but recently closed its first pre-seed round of $800,000
Investors: Wamda, VentureSouq, Beyond Capital and regional angel investors
Racecard
6.35pm: The Madjani Stakes – Group 2 (PA) Dh97,500 (Dirt) 1,900m
7.10pm: Evidenza – Handicap (TB) Dh87,500 (D) 1,200m
7.45pm: The Longines Conquest – Maiden (TB) Dh82,500 (D) 2,000m
8.20: The Longines Elegant – Conditions (TB) Dh82,500 (D)
8.35pm: The Dubai Creek Mile – Listed (TB) Dh132,500 (D) 1,600m
9.30pm: Mirdif Stakes – Conditions (TB) Dh120,000 (D) 1,400m
10.05pm: The Longines Record – Handicap (TB) Dh87,500 (D) 1,900m
Abu Dhabi racecard
5pm: Maiden (Purebred Arabians); Dh80,000; 1,400m.
5.30pm: Maiden (PA); Dh80,00; 1,400m.
6pm: Sheikh Zayed bin Sultan Al Nahyan National Day Cup (PA); Group 3; Dh500,000; 1,600m.
6.30pm: Sheikh Zayed bin Sultan Al Nahyan National Day Cup (Thoroughbred); Listed; Dh380,000; 1,600m
7pm: Wathba Stallions Cup for Private Owners Handicap (PA); Dh70,000; 1,400m.
7.30pm: Handicap (PA); Dh80,000; 1,600m
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88 Video's most popular rentals
Avengers 3: Infinity War: an American superhero film released in 2018 and based on the Marvel Comics story.
Sholay: a 1975 Indian action-adventure film. It follows the adventures of two criminals hired by police to catch a vagabond. The film was panned on release but is now considered a classic.
Lucifer: is a 2019 Malayalam-language action film. It dives into the gritty world of Kerala’s politics and has become one of the highest-grossing Malayalam films of all time.
'Gold'
Director:Anthony Hayes
Stars:Zaf Efron, Anthony Hayes
Rating:3/5
Fireball
Moscow claimed it hit the largest military fuel storage facility in Ukraine, triggering a huge fireball at the site.
A plume of black smoke rose from a fuel storage facility in the village of Kalynivka outside Kyiv on Friday after Russia said it had destroyed the military site with Kalibr cruise missiles.
"On the evening of March 24, Kalibr high-precision sea-based cruise missiles attacked a fuel base in the village of Kalynivka near Kyiv," the Russian defence ministry said in a statement.
Ukraine confirmed the strike, saying the village some 40 kilometres south-west of Kyiv was targeted.
MATCH INFO
Manchester United 2
(Martial 30', McTominay 90 6')
Manchester City 0
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OIL PLEDGE
At the start of Russia's invasion, IEA member countries held 1.5 billion barrels in public reserves and about 575 million barrels under obligations with industry, according to the agency's website. The two collective actions of the IEA this year of 62.7 million barrels, which was agreed on March 1, and this week's 120 million barrels amount to 9 per cent of total emergency reserves, it added.
How to turn your property into a holiday home
- Ensure decoration and styling – and portal photography – quality is high to achieve maximum rates.
- Research equivalent Airbnb homes in your location to ensure competitiveness.
- Post on all relevant platforms to reach the widest audience; whether you let personally or via an agency know your potential guest profile – aiming for the wrong demographic may leave your property empty.
- Factor in costs when working out if holiday letting is beneficial. The annual DCTM fee runs from Dh370 for a one-bedroom flat to Dh1,200. Tourism tax is Dh10-15 per bedroom, per night.
- Check your management company has a physical office, a valid DTCM licence and is licencing your property and paying tourism taxes. For transparency, regularly view your booking calendar.
if you go
The flights
Emirates flies to Delhi with fares starting from around Dh760 return, while Etihad fares cost about Dh783 return. From Delhi, there are connecting flights to Lucknow.
Where to stay
It is advisable to stay in Lucknow and make a day trip to Kannauj. A stay at the Lebua Lucknow hotel, a traditional Lucknowi mansion, is recommended. Prices start from Dh300 per night (excluding taxes).
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
The years Ramadan fell in May
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
MORE ON TURKEY'S SYRIA OFFENCE
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
UAE currency: the story behind the money in your pockets
Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
Mia Man’s tips for fermentation
- Start with a simple recipe such as yogurt or sauerkraut
- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.
- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.
- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.
