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Uber’s disastrous record – worst dollar loss ever for a US IPO’s first day – Stuff.co.nz

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The much-anticipated Uber initial public offering managed to break a record, but not one that investors would have hoped for. The stock closed down 6.7 per cent on its opening day to US$41.70 (NZ$63.31), down from the US$45 a share the company priced at on Thursday night ahead of the IPO that had valued the company at US$75.5 billion. In total, the discount off the IPO price meant that investors who got in at that price saw a cumulative loss of US$655 million. By the end of day Friday, Uber had a market cap of US$69.7b, far below the US$120b valuation figure bankers had suggested in 2018. That made it the biggest first-day dollar loss of a US IPO, Jay Ritter, a professor at the University of Florida’s Warrington College of Business told Business Insider. Ritter’s figures accounted for IPOs from 1975 on.RICHARD DREW/APThe much-anticipated Uber initial public offering managed to break a record, but not one that investors would have hoped for. READ MORE: * Uber trades below last private value in rocky post-IPO start * Uber makes its workers millionaires as it prices IPO at US$45 a share * Uber drivers to strike in the US ahead of company’s huge market debut Percentage-wise, other IPOs have suffered far worse opening day closes. Ritter said on a percentage basis, Uber’s first day ranks as the 99th worst open for IPOs raising more than US$100m. It’s the combination of the drop and the size of the IPO in the first place that makes it the biggest first-day dollar loss. Prior to Friday, the largest first-day dollar loss of a US IPO was in 2000 when Genuity, an internet company spun out of Verizon, went public. On its first day, Wall Street Journal reporter Rolfe Winkler noted, Genuity had lost US$233m.RICHARD DREW/APBy the end of day Friday, Uber had a market cap of US$69.7b, far below the US$120b figure bankers had suggested in 2018. That makes Uber’s first-day dollar losses almost three times as much. Uber’s IPO came during a particularly turbulent week as tensions elevated between the US and China. The timing may have cost the company billions. – This story first appeared at BusinessInsider.com.au
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