Uber's Disappointing IPO: What The Pros Are Saying

Ride-hailing company Uber Technologies Inc UBER saw its shares trade on a public market for the first time Frida.  On top of opening for trade below its IPO price of $45, shares of Uber ended the day lower by more than 7 percent, with the selling momentum carrying over to Monday's session. 

What Happened To Uber?

CNBC's Elizabeth Schulze offered a list of multiple concerns that she said are contributing to Uber's stock sell off. First, the timing of Uber's IPO coincided with a general "risk off" pivot amid Sino-American trade war concerns, she said. Second, rival Lyft Inc LYFT reported first-quarter results ahead of Uber's IPO that were highlighted by a loss of more than $1 billion in the quarter, the CNBC correspondent said. 

Third, the lack of loyalty from Uber's drivers was evident in a worldwide strike ahead of its IPO and poses a "driver loyalty question," Schulze said. 

A Ride-Hailing Or Unicorn Problem?

Uber's IPO comes at a time when fellow billion-dollar companies, referred to as "unicorns," are faring better, Dan Primack, business editor at Axios, told CNBC Monday.

For example, Pinterest Inc PINS closed its first trading day at $24.40 and shares remain above these levels, he said. 

If Slack's upcoming IPO performs well, it may serve as further evidence the market has a "ride-hail problem, not a unicorn problem, Primack said. 

Disappointing Start

Uber's stock sell-off Friday makes its trading debut "disappointing," as the stock wasn't priced "conservatively enough" and not "priced to pop," CNBC's Leslie Picker also said Monday.

In addition, Uber's stock wasn't sufficiently stabilized, as Morgan Stanley bankers "had the ability to ensure a smoother debut by supporting the stock," the CNBC reporter said. 

The bankers did use some "firepower" Friday, but it proved to be either "too little or at the wrong time," she said. 

Institutional orders were "slightly smaller" compared to similar high-profile IPOs, Picker said. 

Many institutional firms already had exposure to Uber prior to the IPO and "some of those that did obtain allocation were quick to flip them," she said.

Related Links:

What To Know From Lyft's First Quarterly Earnings Report

Uber's First Day On Wall Street

Photo courtesy of Uber.