Uber Stock Hits All-Time Low as Investors Prepare to Jump Ship

On Wednesday, Uber hit a new 52-week low after its lockup period ended.

It seems like Uber Technologies just can’t catch a break as news surrounding the company keeps going from bad to worse. The company went public last May, and its IPO was generally considered a flop. And other than a brief uptick in June, the stock hasn’t done too well since then. 

This week, the company released its third-quarter earnings, and overall, they beat Wall Street’s forecasts. But the earnings report didn’t do enough to ease investors’ fears, and the stock slumped nonetheless. Then on Wednesday, the company’s shares hit a new all-time low when the company’s post-IPO lockup expired.

Uber’s lockup period ends 

On Wednesday, Uber hit a new 52-week low after its lockup period ended. Once the post-IPO lockup expires, early investors are free to sell their shares. This only added to the volatility surrounding the stock.

As of Wednesday morning, roughly 90% of Uber’s shares are available for sale. If a large number of investors sell their shares, this will put a great deal of short-term pressure on Uber stock. 

However, Uber does have one saving grace, which is that many investors will be unwilling to sell their shares since the stock is currently underwater. Uber’s IPO price was $45, and as of this writing, the company’s shares are currently trading at $26.96 per share. 

Investors will be watching closely to see if any of Uber’s biggest buyers start selling their shares. These investors include companies like PayPal, SoftBank, Morgan Stanley, and more.  

Final thoughts

What’s interesting is that out of the 27 analysts reviewing the stock, not a single one recommends selling. An analyst from Raymond James recently reiterated his buy rating on the stock. The analyst said that once the company gets through the post-IPO lockup, he expects the stock to perform much better in 2020.

Investors may be freaked out about the future of Uber, but most Wall Street analysts are still pretty positive when it comes to the company. The company is currently considered a strong buy, with a potential upside of 77%. Time will tell if Uber investors can capture some of this optimism.