Uber Technologies Inc.’s tough times as a public company continued Monday, with the stock posting its lowest close yet.
Uber’s stock UBER, -7.62% — which sold for $45 in a May initial public offering — fell 7.6% to $37.01 Monday, closing lower than $39 for only the second time. Uber’s previous record closing low was $37.10 on May 13, the day its chief executive sent an email to employees stressing that Uber’s long-term value would eventually be realized.
Shares in rival Lyft Inc. LYFT, -4.97% fell 5% to $56.18 Monday, its lowest close since late May. The two stocks have managed to close higher than their IPO prices in just two sessions apiece so far.
Late on Friday, Yahoo reported that Uber had instituted a hiring freeze, as the company emailed job applicants to cancel coming interviews. The company confirmed to Bloomberg News that it was pausing hiring for engineering and product-manager roles, but not for positions in freight or autonomous driving.
A day earlier, Uber posted a staggering $5.2 billion loss, driven mostly by stock-compensation expenses, though some analysts were encouraged by “tantalizing clues” suggesting that Uber’s core ride-hailing business is somewhat close to breaking even.
Opinion: Lyft and Uber are giving investors what they want, which is bad for the rest of us
There haven’t been too many happy moments for Uber and rival Lyft since the companies went public earlier in the year, but one came last week when Lyft delivered its own report and disclosed that the price war with Uber was easing. Lyft also delivered a rosier-than-expected forecast for the full year.
Profitability remains a key question for the ride-hailing giants, especially in the wake of Uber’s big second-quarter loss. Though stock-compensation expenses played a big role, Uber is also investing heavily in new mobility ventures and its freight business, moves that could weigh on margins for the foreseeable future. Lyft’s narrower focus has analysts more enthusiastic about the company’s ability to generate profits, but there’s still concern about the rapidly evolving ride-hailing landscape.
Uber shares have dropped 15% in the past month, while Lyft shares have fallen 12%. Uber went public in early May at a price of $45 a share, while Lyft priced its initial public offering at $72 a share. Both stocks are trading significantly below those levels despite a strong period for IPOs overall. The Renaissance IPO ETF IPO, -1.50% has climbed 33% so far in 2019.
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