What's moving markets today: Uber IPO and tariffs
Uber opened at $42 a share on Friday, below its IPO price of $45, and ended the day even lower at $41.57. That makes it one of the rare venture capital-backed technology companies to finish its first day of trading in the red.
Its public debut came at the end of a turbulent week filled with headlines about striking workers, steep losses in the ride-hailing industry and broader market jitters over an escalating trade war between the United States and China.
US stocks ended Friday’s session higher, but every major index still recorded losses for the week. It was the Dow’s worst week since March.
Trading this week was marked by worries about a trade war with China after tensions escalated on Sunday.
Both the S&P and the Nasdaq snapped a four-day losing streak, but still had their worst week since December.
The Dow bounced back from its earlier losses on Friday after Treasury Secretary Steven Mnuchin and President Donald Trump characterized talks with Chinese negotiators as "constructive."
Mnuchin's comments to CNBC led to stocks to move off their lows. Trump followed them up with a tweet, saying the talks would continue and calling his relationship with China's President Xi Jinping "strong."
The Dow, which had fallen more than 300 points at one point, turned positive in the final hour of trading. It was last up some 85 points, or 0.4%. The S&P 500 and Nasdaq also rebounded. The S&P was last up 0.2%, while the Nasdaq remained 0.1% in the red. The S&P and Nasdaq have closed lower for the past four days in a row.
Uber's (UBER) hugely disappointing Wall Street debut is historic. Never has a company this well-known, one that has generated such an insane amount of hype and media coverage, done as poorly on its first day of trading.
The only company that came close to being this big of a flop when it went public was Facebook (FB) back in May 2012. Shares rose less than 1% on their first day.
Here's a look at how several other high-profile tech firms have fared on their IPO day.
Facebook needs to be reined in.
That's the message from Democratic presidential candidate Tulsi Gabbard, who was disturbed by Thursday's op-ed from Facebook co-founder Chris Hughes that argued the company should be broken up.
It shows "how dangerous it is when you have one person, Mark Zuckerberg, who wields incredible power over what pops up in our newsfeeds," Gabbard, a Congresswoman from Hawaii, said on Friday at the SALT Conference in Las Vegas.
Hughes' New York Times op-ed described Zuckerberg as more powerful than anyone in the government or even the private sector. He noted that only Zuckerberg can tinker with Facebook's algorithms to determine what people see on the social network and how to determine what's considered offensive content.
"We've got to break up these monopolies," Gabbard said, mentioning Facebook and Google specifically.
She called for greater oversight into how big tech companies are "misuing our own private information."
US stocks bounced back from their lows in early afternoon trading after Treasury secretary Steven Mnuchin said the talks with Chinese negotiators had been "constructive".
China's Vice Premier Liu He reportedly said the talks had gone "fairly well".
The Uber (UBER) IPO may have been a dud. But there's another company that went public on Friday and its stock is surging. Shares of Chinese online lending marketplace Jiayin Group (JFIN) were up more than 40% in their debut.
Scott Coyle, CEO and co-founder of ClickIPO, an app that allows individual investors to buy and sell shares of new stocks, said there was solid demand for Jiayin among the more than 100,000 people who have downloaded the ClickIPO app.
The success of Jiayin is all the more impressive given the market volatility as of late due to increased trade tensions between the US and China this week and worries about how the Chinese economy could be hit by a prolonged spat.
Coyle thinks the strong debut for Jiayin bodes well for a larger and more well-known Chinese firm expected to begin trading next week: Luckin Coffee (LK). Luckin, which will list on the Nasdaq, has been dubbed the Starbucks of China. Coyle says there has been a fair amount of interest in Luckin from ClickIPO users.
If this trend keeps up, then perhaps Chinese ridesharing giant Didi will do better than Uber and Lyft (LYFT) if it decides to go public.