But that wasn’t enough to guarantee investor enthusiasm on Wall Street.
Shares of Uber fell more than 7% on its first day of trading Friday, marking a rocky Wall Street debut for a company that endured plenty of bumps on its long road to going public. Uber opened at $42 a share, below its IPO price of $45, and ended the day even lower at $41.57.
That disappointing first day performance sets Uber apart from the vast majority of its tech peers. In the past five years, only 10% of venture capital-backed US technology IPOs finished the first day in the red, according to data provided to CNN Business from Renaissance Capital, which manages IPO-focused exchange-traded funds.
Uber did succeed in raising $8.1 billion in one of the largest public offerings ever, a substantial war chest that should fund the company’s expansion into new cities and service categories. But that amount was still at the low end of what Uber originally set out to raise.
The less-than-stellar offering could prove to be just the first rude awakening Uber faces as it transitions to the public market. Over the last decade, Uber emerged as the poster child for a generation of technology startups that raised — and lost — unprecedented amounts of money while avoiding going public as long as possible. But that may not fly on Wall Street.
“It’s amazing what [Uber has] built, but they are still not done doing it. They’ve been subsidizing the business,” said Kathleen Smith, principal at Renaissance Capital. “The boat doesn’t float on its own bottom.”
As Smith points out, tech companies that have come to market in recent years with massive losses — including Lyft and Snap — are currently “not trading above their IPO price.”
Uber’s long and bumpy road
Along the way, Uber destabilized the taxi industry, became the most valuable US startup and emerged as the darling of Silicon Valley, spawning an entire category of companies billing themselves as the “Uber for X.”
Under Khosrowshahi, Uber also reconsidered its efforts to operate all across the world. “One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors,” he said last year.
A bad week to go public
After that mad dash to overhaul its business and go public, Uber ran into a different problem: the Week from Hell.
On Sunday, President Trump surprised investors by threatening to impose higher tariffs on China in a tweet. The market swung wildly amid concerns of an escalating trade war between the United States and China.
Then on Tuesday, Lyft reported its first earnings report since going public, which revealed more than $1 billion in losses during the first three months of this year. Lyft stock continued its decline the day after.
At one time, Uber rooted for Lyft to fail. But as the closest proxy to Uber on the public market, Lyft’s stock decline only made Uber’s IPO pitch that much harder.
Daniel Ives, an analyst with Wedbush, said in an investor note this week that Lyft’s stock performance, combined with broader market jitters, likely “caused Uber to look at a more conservative price range based on its demand for its IPO.”