RIDE HAILING STOCKS TO WATCH

These Two Ride Sharing Stocks Have Slid But Does That Mean It’s An Opportunity Or Another Red Flag?

Earlier this year, Wall Street and the rest of the world was abuzz at the prospect of two of the most eagerly anticipated initial public offerings. Both belonged to ride-sharing companies. One was LYFT Inc (NASDAQ:LYFT) and the other was the global behemoth Uber Technologies Inc (NYSE:UBER).

IPO Stocks Hitting New Lows; Why?

The stocks didn’t perform that well, post-listing day and earlier this week, both stocks sunk to their record lows. The plunge took place last week. According to analysts, the decline is due to widespread skepticism about the business models of the companies. Over the past few weeks, many public companies have been subject to scathing criticism from the public.

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Last week, Uber stock dropped by as much as 4% to and hit a low of $28.15. This was the lowest level in its history. Lyft, which had its IPO ahead of Uber, saw its stock go down by 4% to hit $37.92. Uber had hit a previous low of $30.29, while the same for Lyft was $40.84.

Both of those lows had been reached in the last days of September. Uber’s valuation sits at $49 billion as opposed to its private valuation of $76 billion. The situation with Lyft is not as bad since it is current valuation stands at $11.6 billion as opposed to the private valuation of $15 billion.

What Does The Future Hold?

The current situation with many of the tech companies which had its IPOs this year is due to the increased scrutiny about the business models of these outfits. The final nail for investors had been the whole fiasco surrounding the IPO of the co-working space firm WeWork.

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The company has eventually decided against going for the IPO after it appeared that it would have to reduce its valuation from $45 billion to $15 billion. That gave rise to increased scrutiny of another tech IPOs as well and it seems it is a downturn that is going to take some time to reverse.

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