Ride-hailing service Uber Technologies, Inc. UBER became a public company exactly four years ago and the ride for investors hasn't been smooth so far.
Debuting With Fanfare: San Francisco, California-based Uber was founded by Garrett Camp and Travis Kalanick in 2009 as a solution to the problem of mobility they personally experienced. The duo had to spend a hefty $800 for a private driver on New Year's Eve and this sowed the seed for Uber, which they conceptualized as a mobility-as-a-service.
Camp was the technocrat offering his expertise and Kalanick joined as the incubator.
Camp, along with some friends, built the prototype of Uber’s mobile app. Following a beta launch in May 2010, the service and the mobile app were widely rolled out in 2011. The company followed it up with the launch of a shared transportation service in San Francisco in August 2014 and also started a food-delivery service under the brand name Uber Eats.
By 2015, Uber became the most valuable startup, as its valuation based on the funding rounds rose to $51 billion.
Uber could not survive in China for long and sold its business to local stalwart DiDi in 2016 and earned an 18% stake in the latter in exchange.
The company went public in 2019 by offering 180 million shares at a price of $45 per share. The stock opened at $42 on its debut on the NYSE and moved in a range of $41.06-$45 before settling the session at $41.57.
The shares have been mostly range-bound since then. Immediately after the pandemic peak, the stock rallied to its all-time high of $64.05 on Feb. 11, 2021. It has come notably off the level since then.
Source: Benzinga Pro
See Also: How To Invest In Startups
The Controversies: Even ahead of the public debut, the company was mired in several controversies. In 2017, a blog post by ex-Uber engineer Susan Fowler that documented her experience of sexism at the company went viral.
Kalanick was also involved in other controversies, including his close association with then-President Donald Trump and Uber's decision not to participate in a New York City taxi strike in protest of Trump's travel ban.
Under pressure from major investors, Kalanick went on a leave of absence initially and then quit in 2017, with Expedia CEO Dara Khosrowshahi taking over the helm.
Fundamentals Looking Up: Cut-throat competition has been weighing down on Uber's bottom line and it is yet to turn into a profit.
The first-quarter results released last week showed that the company's loss shrunk from $3.04 per share to $0.08 per share. Revenue climbed about 29% to $8.82 billion.
Following the results, Oppenheimer analyst Jason Helfstein noted improvements in consumer/driver engagement pushing up trip growth. The company is also a beneficiary of a near-term tailwind from a return-to-office on the West Coast and upfront pricing in select international markets.
Helfstein said Uber continues to be his top large-cap pick.
The average analyst price target for Uber shares, based on data compiled by TipRanks, is $48.74, suggesting about 28% upside potential.
IPO Returns: A $1,000 Invested in Uber at the IPO price of $45 would have fetched 22.22 shares. The same would be worth about $849 now, a 15.13% loss.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
In premarket trading on Wednesday, Uber shares shed 0.58% to $37.97, according to Benzinga Pro data.
Read Next: Uber Got Its Mojo Back While Lyft Faces an Existential Crisis
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