Question

What has happened to the UBER since the IPO in terms of marketing, production, and other operations? I need around 300 word answer for this

Answer 1

IPO of UBER was marketed to be one of the best offering in recent times and was poised to be in the ranks of Google, Facebook, Alibaba. The investment bankers to UBER pitched in the valuation at $120 Billion and set the offer price at $45-$50 dollar range. But some of the large investors who already owned the Uber Shares did not participate in buying more shares since their holding was at a much lower price. The company was hit with slowing growth in regions like Latin America and deep losses. It was faced with competition from local players like Didi Chuxing in China, 99 in Latin America which had funding from power house investor – Softbank which was also Uber’s biggest investor.In addition to this, the timing of the IPO coincided to the trade war between US and China when President Trump tweeted that he wants to raise tariffs on $200 Billion Chinese goods and the stock markets reacted sharply to this.

Post IPO , Uber’s first and foremost goal is to bounce back to it’s offer price and then move upward. It has to curtail losses across globe and show it’s profitability. The hefty task in hand is to re-gain investor confidence and manage expectations. Since it is a transport-technology company, it has to constantly upgrade its technology and fight off competition too. However, it has to cut down on non- value added costs and shut down unprofitable operations to stay on top.It may cut down on employee cost and marketing expenditure to improve the cost-Income ratio.Frenzy valuations and marketing may get you some money but then bottom line is what matters to a rational investor. Uber has to prove its mettle and justify its value proposition to investors sooner than later.