Uber Rings NYSE Bell, Watches Stock Slide Below Offering Price

(Bloomberg) -- It was the largest public offering in five years, since Alibaba, and for all of Uber’s pre-bell preparations, company executives were still nervous.

“Waiting for the first trade,” Dara Khosrowshahi, Uber Technologies Inc.’s chief executive officer, tweeted out at 11:18 a.m. with an emoji of a butterfly and the word “stomach.”

Uber may be a global company, in theory big enough to withstand the pressures of the market, but the drama of a day that disappointed deeply played out on the floor of the New York Exchange. As shares dropped to well under their IPO of $45, monitors bled red. There was no hiding the ill ease of a bad Friday opening, with a painful weekend to see if Monday will bring better news. The stock will begin the week at $41.57.

“That’s what you get when you don’t make a profit,” groused one trader, loud enough to be overheard. “If you don’t make money, people don’t want to buy you.”

Rocky Debut

Shares of its rival Lyft Inc., whose recent IPO also disappointed, fell as well. A looming trade war between the U.S. and China hung like fog. By day’s end, Uber’s market capitalization was only $69.7 billion, and shareholders as far back as 2016 ended the first day of trading underwater.

The trouble really began Thursday when Uber announced it would price its public offering near the bottom of its already conservative price range. Uber valued itself at $75.5 billion, less than its last private valuation and far below the $120 billion that bankers once floated. Still, it seemed like Uber might just be saving room for a first-day pop.

“Yesterday after the pricing meeting with the bankers, it was the first day it really hit me,” Khosrowshahi said.

“We’ve been on the road for what seems like an eternity,” he said. “This is actually happening.”

In white font on a black background in its custom-made sanserif typeface, the word “Uber” hung over the iconic New York Stock Exchange building with its white Georgia Marble facade. Inside, screens alternated between the Uber logo and illustrations of vehicles like helicopters and autonomous cars.

On the Podium

Friday morning, Khosrowshahi gathered with some of Uber’s most loyal executives. Rachel Holt and Andrew Macdonald, who have both taken turns overseeing Uber’s core North American ride-hailing business, appeared on the podium, as did Jason Droege who has shepherded the company’s food delivery business from its early days. Austin Geidt, who joined Uber as an intern and then rose to becoming a key executive, rang the bell for the company at 9:30 a.m.

Uber co-founder Travis Kalanick, who wasn’t invited to ring the bell, stood on another balcony with his father by his side.

Market makers at Citadel Securities worked to find an opening price. The indicated range started at $46 to $48, the numbers illuminated on boards around the exchange.

Uber board members gathered on the trading floor, just feet from reporters penned in gawking at the proceedings. Co-founder Garrett Camp and early Uber CEO Ryan Graves stood by and watched as their fortunes shrank.

John Thain found himself at a familiar place. He stood feet away from Nelson Chai, his deputy back at NYSE Euronext, now Uber’s selfie-taking CFO. This time Thain was there as an Uber board member, with a front row seat in front of the Citadel Securities desk.

The market maker lowering the anticipated range again and again, each update felt like it certainly must be the last. The price dropped below Uber’s IPO price and still it fell. Traders shouted to each other as the price went lower. The mood was subdued.

Eventually, Peter Giacchi, the Citadel Securities market maker, shouted that there were five to 10 minutes until trading would begin. The crowd built into a frenzy. Trading began and the opening bell rang. People finally celebrated -- despite the uncertainty.

And after the floor cleared, Khosrowshahi stood for yet another interview. “It was amazing,” he said. “I’m thrilled to be here.”

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