The IPO for Uber (UBER) has fallen out the bed. The company priced its IPO at $45 and 36.10$ lowest point for the point.
The company’s operating losses decreased year over year from $4.1 billion to $3.1 billion. Improving net loss is a positive for Uber, but $3.1 billion is still a huge figure, particularly within the context of slowing growth. UBER is NOT the kind of stock investors should rush to grant a premium. Still, UBER is now priced at 5.5x sales, just above the 5.1x for Grub Hub (GRUB) which competes directly with Uber Eats and also strongly relies upon a flexible labor force of non-professional drivers.
Today however the stock gained a bit and closed at 39.96$. But I think that it will drop down a bit more...
My preferred spot to buy UBER is around 5x sales or $33-$34 to account for more of the risk in the business and the stock. Technicals should help refine the entry point. For technicals, I lean on my framework of stepping aside while sellers are getting busy and jumping in when buyers show strong interest: “Anatomy of A Bottom: Do Not Argue With Sellers – Celebrate With Buyers.”
