Uber had the worst first-day dollar loss ever of any US IPO
- Uber started trading on Friday in an initial public offering that valued the company at $75.5 billion.
- By the end of day Friday, the stock was trading down 6.7% off the $45 a share, where the company had priced on Thursday night.
- With a cumulative loss of $655 million, it's the worst first-day dollar loss of a US IPO.
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The much-anticipated Uber initial public offering managed to break a record, but not one that investors would've hoped for.
The stock closed down 6.7% on its opening day to $41.70, down from the $45 a share the company priced at on Thursday night ahead of the IPO that had valued the company at $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 $655 million. By the end of day Friday, Uber had a market cap of $69.7 billion, far below the $120 billion 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.
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 $100 million. 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 $233 million. 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.
Alexei Oreskovic contributed reporting.
- Read more about Uber's IPO:
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- Actress Olivia Munn made a savvy Uber investment in 2011 but was roasted for a now deleted tweet about it people called 'tone deaf'
- Uber blew as much as $3.2 billion on advertising alone in 2018 on its way to one of the biggest US IPOs on record
- Here's who's getting rich on Uber's massive IPO