UBER Stock Trading
Uber Technologies (NYSE: UBER), most commonly referred to as simply Uber, is a mobility services company, best known for its ride-hailing service. In addition, it also has a food delivery service and a micro-mobility service featuring scooters and bikes. Uber freight matches shippers and carriers, and Uber Health provides ride-sharing for patients, caregivers, and staff. They also began testing flight services and is working on making self-driving cars a reality.
Uber has its headquarters in San Francisco and operates in nearly 800 metropolitan areas across the globe. Its platforms are typically accessed via mobile apps or on its website.
Uber began in 2009 as UberCab. It was co-founded by Garrett Camp, who was also a co-founder of StumbleUpon, and Travis Kalanick, who was the founder of Red Swoosh, a peer-to-peer file sharing service.
The idea for Uber began after Camp and friends spent $800 for a private driver on New Year’s Eve. Camp believed there must be a way to reduce the cost of direct transportation. He began with the idea of sharing the cost, and that idea later morphed into the idea for Uber. Kalanick later joined Camp but gives him full credit for coming up with the concept for Uber. Camp and his friends created the first prototype of Uber, and Kalanick then joined the project as a “mega advisor.”
Uber launched in beta in May 2010 and officially launched in San Francisco in 2011. The original application was only designed for hailing a black luxury car, and the cost was 1 ½ times that of a taxi.
It’s been estimated that Uber has 110 million users worldwide as of 2019. It has also captured 67% market share in the US. for ride-sharing as of early 2019, and a 24% market share in food delivery as of 2018. It’s been estimated by the National Bureau of Economic Research that Uber was responsible for a $6.8 billion consumer surplus in 2015, and that amount can only have grown since.
As with other companies participating in the sharing economy, and especially transportation networking companies, Uber has faced criticism for alleged unfair treatment of their drivers, for creating chaos within the taxicab business, and for increasing the amount of traffic overall on the streets in the metropolitan areas where it operates. In addition, Uber has been criticised for several other unlawful practices over the years, and its aggressive strategy it uses when dealing with regulators.
Uber Price History
Uber became a publicly traded company on the New York Stock Exchange using the ticker symbol UBER on May 10, 2019. The IPO was underwritten by over 30 different banks, including Morgan Stanley, and was one of the most highly anticipated IPOs of the year. That’s why it was such a disappointment to investors when shares were listed for $45 at the open on May 10, and fell roughly 11% on that first day of trading, making for the largest first day loss for an IPO in the US stock market history. The stock traded back above the $45 IPO price in June 2019, but by July 2019 it fell back below its IPO price and as of January 2020 hasn’t recovered.
The very first earnings report from Uber as a public company showed a loss of $1 billion, but the stock price held up well as investors had been expecting the loss. The next earnings report for the second quarter was disastrous though, with Uber reporting a loss of $5.2 billion for the quarter. While $3.9 billion of that loss was attributed to stock-based compensation expenses, Uber stocks tanked in response, and by September the stock traded as low as $28.65 a share.
Following the sharp drop in the price of Uber stocks, the company has undertaken layoffs in its marketing department, engineering department, and from the product team. Even so, the stock hit an all time low of $25.58 in November 2019.
Since hitting that low, the price of Uber stocks appears to be recovering somewhat, rising steadily in December 2019 and trading up to $33.41 a share as of early January 2020. That remains more than 25% below the IPO price, however, and with the fourth quarter earnings scheduled to be released on February 3, 2020, we could see shares take a hit if losses for the quarter are larger than the forecast $0.63 a share.
Uber Trading Ideas
Uber has been extremely depressed since its IPO as investors worried about regulatory issues, and then the huge second quarter loss. The third quarter did show improvement, and the biggest help for the stock has been the expiration of the lockup period on stock issued to insiders during the IPO. That period ended in November, and coincidently the stock has been on an uptrend since.
As of January 2020, analysts are becoming increasingly bullish on Uber stocks, with 22 out of 37 rating it a buy, and 12 rating it a hold. Only one analyst recommends selling the stock. That should make Uber a good target when trading stock, especially on any large dips in the share price. 2020 is looking like a good year for the stock to at least return to IPO levels, which would be an increase of more than 30% from its early January price.
Uber’s Future Earnings
Quarterly financial results tend to provide a good opportunity for trading Uber stocks. The stock has exhibited a tendency towards volatility in response to earnings, so either a beat on expectations or a disappointment will likely give the stock a large push up or down. CEO Dana Khosrowshahi said the stock could finally be profitable by 2021. Traders will try and see if the losses in the quarter are shrinking faster than expected and the company continues to be on the right path to profitability.
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AvaTrade Uber Technologies Inc. Stock Trading Information
- Uber Stock Symbol: #UBER
- Trading Times: Monday – Friday 14:30 – 20:59 GMT
- Country: USA
- Currency: USD
- Exchange: NYSE
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Uber Stock FAQ
- Why should I trade Uber shares?
As the largest ride-sharing platform in the world Uber is leading a new technology that’s fundamentally changed consumer behaviour in urban areas. As the company expands to include delivery services and develops autonomous vehicles it is poised to become an increasingly dominant force. Trading shares in Uber is popular for active traders because the stock, like many of the new technology names, is quite volatile and prone to large moves. That can make it possible to generate healthy profits quite rapidly when entries are timed properly.
- Is Uber the best technology stock for trading?
There are many technology stocks to choose from for active traders, and many of them are volatile, presenting solid trading opportunities on a regular basis. Uber is occasionally the best technology stock for trading, but the landscape of these stocks’ changes on a nearly daily basis, so you can’t expect Uber to always be the best technology stock for trading. But it does bear watching on a regular basis because there’d no telling when price action in the stock might explode, opening up a potentially profitable trading opportunity.
- What’s the best strategy for trading Uber shares?
Uber shares have very little history to go on, as the stock only had an IPO in May 2019. Since that time the stock has spent a good deal of time range-bound, although it remained fairly volatile within that range. When the stock is range-bound like that it can be good to use a technical indicator like the stochastic oscillator to trade the range. Simply sell when the oscillator reaches 80 and but when it drops to 20. Once a trend is established the trader can switch to a different trend-following strategy, such as Keltner Channels.