Uber has long been a favorite of the Silicon Valley unicorns, a promising logistics mobile app with seemingly endless possibilities. And this week the trading public will get to take a bite of that delicious promise as the ride-hailing app company went public on Friday.
The ride-sharing giant has an impressive first day stock price for a new IPO, at $45 per share (priced out on Thursday, before the initial opening). And, on the first day, Uber traded in a fitting range of $46 to $48 early in the day. You may recall that last month Uber lowered its preferred IPO range to a maximum of $50.
Of course, much of this has been speculation and we won’t really appreciate Uber’s move to the public market until the end of its first day and first week. After all, the market can be unpredictable and with Uber competitor Lyft also trading publicly, it is not always easy to predict how investors will respond.
Still, Uber is probably the most eagerly-anticipated offering in this recent wave of technology IPOs expected to come to the public market this year. But with the US-China trade ware mounting in a time when US economic conditions are extremely uncertain, Uber—like other tech companies—have struggled. This is particularly true when we look at Lyft’s disappointing debut, which opened near $90 but quickly plummeted to just shy of $53 on its first day.
But Uber investors are optimistic. Early investor and partner at Menlo Ventures, Shawn Carolan, for example, comments, “Uber is a great reminder to venture capitalists that the biggest opportunities lie in our most common needs as humans. When a start-up presents, look beyond the current product, which often feels trivial, to the underlying need being served. An on-demand black car service was easy to dismiss, but nearly everyone needs transportation.”
At present, ride sharing accounts for only a fraction of total vehicle miles traveled in the United States. However, most industries grow incrementally at first until there is a tipping point, at which point those with the most stability will start to grow exponentially. Both Uber and Lyft have taken a decade or so to get to where they are; and that means the tipping point could be just around the corner.