Uber Stocks Continue Hard Fall, As Company Applies Brakes In Hiring
Uber Technologies Inc's struggles as a publicly-listed company continued during pre-market sessions Monday, with shares on Wall Street hitting its lowest as the company literally couldn't steer clear of troubles ahead.
After reporting dismal results for the second quarter last week, Uber's stock crashed almost 8% to $37.00, falling below its previous low of $37.11 on May 13 - the day its chief executive emailed company personnel that Uber's competitive long-term market value would ultimately be realized.
Since the ride-sharing services company's initial public offering (IPO) in May, Uber stocks have dropped around 19% of their market value from its IPO price of $45/share.
Uber registered a whopping loss of $5.3 billion in the first three months this year, triggered mostly by share-based cost in compensation. Uber posted a per-share decline of $4.73 on $3.17 billion in total sales, both of which fell beyond analysts' projections.
Uber chief executive officer Dara Khosrowshahi, during a CNBC television interview Friday, described Uber's losses as a "once in a lifetime" dilemma, as he tries to guide the company toward stability and more profits.
Profitability remains a major issue for the ride-hailing company, especially after its discouraging second-quarter loss. Although costs in stock compensations played a critical part, the American multi-national firm is also looking deep into new mobility ventures, moves seen to affect margins in the coming months.
In contrast, shares of competitor Lyft Inc. were down 6% to $56.19 late Monday, also its lowest close since the middle of May. The two companies have been able to perform higher than their initial public offering prices in only two trading days so far.
Market observers continue to remain in doubt about whether or not Uber can reach its short-term goal of "profitability" in the near future. Those worries have put the company and Lyft under extreme pressure in the quarters since their respective IPOs.
Late on Friday, sources bared that Uber had undertaken a halt in hiring, as the company sent emails to job applicants that scheduled interviews were scrapped. Uber confirmed to Bloomberg News that it was freezing all hiring for product-manager and engineering roles, except for freight and autonomous driving positions.
Meanwhile, early company investor Bradley Tusk shared with CNBC on Monday that Uber needs to exert more efforts in more crucial segments of the business, instead of just Uber Eats and ride-hailing in order to stay afloat.