Uber Technologies Inc’s shares fell 12% on Monday, more than doubling their losses since the ride-hailing giant’s poorly received market debut, and its chief executive officer said he expected the stock to remain under pressure in the coming months.
The fall in shares comes against the backdrop of a global stock market selloff sparked by renewed trade tensions between the United States and China.
The stock hit a low of $36.58, valuing the company at about$14 billion less than the IPO price of $45. Shares of smaller rival Lyft Inc, which went public at $72 a share on March 29, were down 7.3% at $47.38.
Uber’s stock “did not trade as well as we had hoped post-IPO”, Chief Executive Dara Khosrowshahi wrote in a memo to employees that was seen by Reuters.
Uber lowered its valuation expectations twice in the past two months to address investor concerns over its mounting losses, and finally priced its IPO at the low end of the targeted range in a bid to avoid Lyft’s stock market struggles.
Uber’s market capitalization has fallen to about $61 billion since its IPO on Thursday, still larger than Wall Street heavyweights including General Motors and FedEx.
Investors have struggled to figure out how much Uber and Lyft are worth, given both companies have not estimated a timeline for turning a profit.
Lyft posted a $1.1 billion quarterly loss last week and forecast losses would peak this year as it controlled expenses and got more revenue from each customer.
Investors are questioning whether achieving profitability will require these businesses to either raise prices for consumers or reduce service levels.