Experts are hitting the brakes on Uber's trading debut.
The ride-hailing company's highly anticipated initial public offering failed to impress investors on Friday, with the stock pricing at the low end of its previously stated range and shedding more than 7% near the end of the session.
Market watchers were largely bearish on the IPO, citing Uber's past issues with its culture and corporate governance.
Here's what five of them had to say about Uber's first day of trading:
Jeffrey Sonnenfeld, senior associate dean at the Yale School of Management, worried about lingering issues with the company's model:
"Looks like they've come a long way on the governance model life stage, but we still have an issue with the drivers. But it's not like Lyft treats their drivers that much better. But that's something which is sort of the dark side of the gig economy in general, which we used to call the free agency labor market … in the past, is that a lot of workers that are cut free like this that don't have benefits and don't have secure employment is an issue."
Tusk Ventures CEO Bradley Tusk, however, wondered if these issues would really resonate with retail investors:
"We all kind of talk to each other and live in this little bubble. When real people all of a sudden can start investing, are they going to say, 'Oh, profitability, driver subsidization,' all of these things we talk about, or just, 'Hey, I get to invest in Uber! That's awesome!'"
CNBC "Mad Money" host Jim Cramer was in Tusk's camp, saying people would likely buy the stock because it carries a familiar name:
"You've got a situation where [the CEO] said it was a mature company. Dara [Khosrowshahi] said it was a mature company. … They have competition and they're not doing that well versus how they were doing, and they've got an Uber Eats that's up against a GrubHub, whose stock has been terrible, and they have Uber Freight, which they're not talking about enough because I think it's very exciting. But you know what? It's a day where I have Uber on my phone and I'll take Uber over anything, and the people with the app, they want to own the stock. And there it is. App, stock."
Former NYSE President Tom Farley flagged what he saw as a host of issues with the company's offering:
"They waited too long to go public. I mean, in my mind, it's manifest. The arguments on that side of the ledger are myriad. Some of the issues they had — I'll call it culture — some of the issues they had with their culture would've been solved in a public market. You wouldn't show up on a quarterly conference call every quarter and have three or four new stories like they were having for 18 straight months. Secondly, the returns for Uber investors haven't really been that good lately. I mean, you look at all the money invested in Uber — 25 billion bucks. Their pre-money valuation last night was [$]73 [billion]. This is a 2.8x investment. That's great and all, but the initial investors got 10,000 times their money. So the recent people, they haven't been making money. This is a company that has needed public discipline, this is a company that has needed a public currency, and it's a company that should have gone public three or four years ago."
Widely followed technology analyst Roger McNamee, co-founder of Elevation Partners, was also concerned about Uber's fate as a public company:
"Can we step back and just look at the really obvious? This deal is not going well, and it's not going well for really important reasons. There are two underlying assumptions in this business, both of which, in my mind, are questionable. One is that there is an unlimited supply of people with cars who are willing to drive for an amount of money that is, in many cities, below the minimum wage. And that, secondly, there will never be any blowback from cities and from drivers for the behavior of this company. And I think both of those assumptions are not sound. They've just raised $8 billion. They've dumped a ton of money with really, really bad fundamentals going on right now. And Lyft has gone out and been a turkey, plus you've got all the stuff going on in the market in general. I mean, we're looking at a potential train wreck here."