After failing to live up to its pre-IPO hype and shares tanking for two days straight since their debut, Uber's CEO Dara Khosrowshahi wrote a letter to his staff, comparing their rough start to the likes of Facebook and Amazon.
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"Obviously our stock did not trade as well as we had hoped post-IPO," Khosrowshahi wrote in the note obtained by The New York Times.
However, he said that employees need to remember that Facebook and Amazon also had "incredibly difficult" post-IPO trading as well.
"And look at how they have delivered since. Our road will be the same," he said, adding that he does not expect things will change overnight and more rough waters are coming in months ahead.
|UBER||UBER TECHNOLOGIES INC.||25.99||-0.72||-2.70%|
On Tuesday, the ride-hailing stock fell more than 10 percent to $37 a share level following its weak market debut on Friday, when it began trading at $42 per share, below its target range of $45.
The company is currently hovering at around a $62 billion market valuation, which is nearly half of the $120 billion it was reportedly seeking as it was preparing to go public.
Khosrowshahi added that despite the negative press, the company has all the capital it needs to demonstrate a path to improved margins and profits.
"As the market sees evidence, sentiment will improve, and as sentiment improves, the stock will follow."
One of the biggest concerns for investors heading into its debut Friday was the company's ability to turn a profit amid massive spending. While revenue grew 42 percent to $11.3 billion in fiscal 2018, the company lost $1.8 billion, excluding some transactions, and spent $14.3 billion last year in the lead-up to its IPO.
In its S-1 filing, the company admitted it could not guarantee if or when it will turn a profit either.
Its debut also follows its top competitor Lyft's rather weak debut. After initially surging in price, its shares have struggled in recent weeks amid the same concerns about profitability.