Taxi-hailing company Uber Technologies Inc. (NYSE:UBER) stock price plunged to its lowest since the company went public. The stock is currently trading at $37.00 which is below the IPO price of $45. This is not the first time UBER stock is closing on a low having dropped to $37.01 on May 13.
This came after then CEO sent an email to staff indicating that the company’s long-term value will be realized eventually. The bleeding of the stock is currently being attributed to concerns about the company’s path to profitability. Unfortunately, it did little to address this in the second quarter.
Currently, there is a lot of pressure on CEO Dara Khosrowshahi. The company fell short of analyst’s bottom and top-line estimates after posting a huge loss of $5 billion. Uber also scored misses in gross bookings as well as adjusted revenue. Sales for UberEats and ride-sharing declined in the second quarter compared to a year ago.
The CEO’s frivolous attitude regarding Uber’s need to get into profitability going forward is even more worrying. In an earnings call, the Dara dismissively told an analyst on the issue of profitability that he was aware of a meme that has been around regarding whether the company will ever be profitable.
Wedbush analyst Dan Ives indicates that kit is difficult to believe the Uber story as it lacks Wall Street credibility. He has pointed to another near term concern for the company which is the expected expiration of its IPO lockup period that is coming on November 3.
On Friday Yahoo reported that the company had instituted a hiring freeze after the company informed job applicant to call off coming interviews. Uber confirmed that it had paused the hiring for product manager and engineering jobs except for positions in autonomous driving or freight.