Uber CEO Warns In Staff Email 'Tough Public Market' Could Last Months
(Bloomberg) -- Uber CEO Dara Khosrowshahi, in an email to staff Monday, acknowledged Uber’s rocky trading debut, while at the same time saying that tech giants Facebook and Amazon also faced difficulties after listing.
“Obviously our stock did not trade as well as we had hoped post-IPO. Today is another tough day in the market, and I expect the same as it relates to our stock," he wrote in the email obtained by Bloomberg News. Uber’s shares fell as much as 11% in trading today, after its debut on Friday. “Sentiment does not change overnight, and I expect some tough public market times over the coming months.”
“Remember that the Facebook and Amazon post-IPO trading was incredibly difficult for those companies. And look at how they have delivered since,” he said. Uber has “all the capital we need to demonstrate a path to improved margins and profits.”
The San Francisco-based company sold 180 million shares at $45 apiece on Thursday, and on Friday it never traded above that price, ending the day down 7.6% at $41.57 even as other stocks gained. The ride-hailing giant dropped today as much as 11% to $37.08 in New York.
Full text of letter:
I’m looking forward to being in front of you at the All Hands tomorrow, but I wanted to send you a quick note in the meantime.
First off, I want to thank you all for your passion for and commitment to Uber. We simply would not be here without you.
Like all periods of transition, there are ups and downs. Obviously our stock did not trade as well as we had hoped post-IPO. Today is another tough day in the market, and I expect the same as it relates to our stock.
But it is essential for us to keep our eye on the long-term value of Uber for our customers, partners, drivers and investors.
Every stock is valued based on the projected future cash flows/profits that the company is expected to generate over its lifetime. There are many versions of our future that are highly profitable and valuable, and there are of course some that are less so. During times of negative market sentiment, the pessimistic voices get louder, and the optimistic voices pull back.
We will make certain that we communicate our incredible value as a company that is changing the way the world moves, but also the value that we are building for our owners. But there is one simple way for us to succeed – focus on the work at hand and execute against our plans effectively.
Remember that the Facebook and Amazon post-IPO trading was incredibly difficult for those companies. And look at how they have delivered since.
Our road will be the same. Sentiment does not change overnight, and I expect some tough public market times over the coming months. But we have all the capital we need to demonstrate a path to improved margins and profits. As the market sees evidence, sentiment will improve, and as sentiment improves, the stock will follow. We will not be able to control timing, but we will be able to control the outcome.
We will be judged long-term on our performance, and I welcome that. It’s all in our hands.
I look forward to being there at the All Hands to answer Qs and tell you more.”
For more on Uber’s IPO, check out the Decrypted podcast:
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