Displaying items by tag: New York Stock Exchange

Uber’s growth slows as it prepares for IPO

Written on Sunday, 17 February 2019 13:37

US ride-hailing colossus Uber disclosed its financial earnings for the final quarter of 2018 which showed its revenue growth has slowed ahead of its much anticipated stock market debut.

The financial figures released by Uber indicated that for the final three months of the year its loss amounted to $865 million, compared with $1.1 billion in the same period a year earlier.

The San Francisco-based firm reported revenue of $3 billion, which represented a 25 percent increase from a year earlier. Uber remains a private company, but routinely discloses some earnings information.

CEO Dara Khosrowshahi has managed to guide Uber through choppy waters since assuming the CEO role from Travis Kalanick.

He is also being tasked with the responsibility of steering the high-value startup to a stock market debut this year, and has promised greater transparency as he seeks to restore confidence in the global ridesharing leader that has been hit by a wave of misconduct scandals and has become embroiled in a series of legal battles regarding its services, particularly in Europe.

Revenue for the full year rose 43 percent to $11.3 billion, with Uber's annual loss shrinking 15 percent to $1.8 billion, according to an official statement from the startup.

Uber operates its’ rideshare business in dozens of countries and has expanded to new areas including food delivery, electric scooters and bikes. The company is recognized as the largest of the venture-backed startups with a presumed valuation of some $70 billion.

Uber CFO Nelson Chai expressed his satisfaction with Uber’s financial results and said, “Last year was our strongest yet, and Q4 set another record for engagement on our platform. Our ridesharing business maintained category leadership in all regions we serve, Uber Freight gained exciting traction in the US, JUMP e-bikes and e-scooters are on the road in over a dozen cities."

Based on gross bookings, Uber Eats has apparently become the largest online food delivery business outside of China.

Published in Apps

Snap Inc. the parent of the app Snapchat saw its shares drop on the New York Stock Exchange on Monday, March 6, as the momentum of its debut on Wall Street the previous week died down. The company’s shares were down 2.26 percent to $23.77 at the close of formal trading on the Stock Exchange.

Snap’s shares jumped 44 percent to close at $24.48 in its inaugural trading day, after raising $3.4 billion in the largest US tech company public listing since Facebook in 2012. The company, known for its popular disappearing messaging application, had priced its offering at $17 to give it a market value of $24 billion.

Snap’s strong debut on Wall Street lifted the company’s value to $28 billion - more than double that of social media rival Twitter, which went public in 2013. The following day, Snap’s shares climbed even higher.

The company boasts over 158 million daily active users who create 2.5 billion "snaps" a day in 20 different languages, generating an expected $936 million in revenues in 2017, according to a report by venture equity firm Goodwater Capital. The report reads, "Snapchat is well-positioned to scale rapidly and take market share in the $652 billion global advertising market."

However, some aren’t so enthusiastic about Snapchat’s potential, referencing Twitter, which has struggled to grow its user-base since its 2013 IPO, and now trades well below its offering price.

On March 6, five of seven financial analysts covering Snap advised investors to "sell" the stock, and none were advising buying shares, according to data compiled by Bloomberg. It remains unclear if Snap can expand beyond its core base of young users or how it will fare in many international markets in a competitive social media landscape.

Published in Apps

Instant messaging application Snapchat's parent company Snap Inc. debuted on the New York Stock Exchange on March 2, and it surged more than 40 percent from the level set in the initial offering the night before. The company soared as its IPO raised $3.2 billion with a price of $17 a share.

Snap Inc. was up about 45.4 percent to $24.72 near 16:30 GMT, shortly after logging its first trades. It was the largest public offering of a US tech firm since the debut of Facebook in 2012. Snap's arrival has been seen by some supporters as an opportunity similar to that of Facebook and its continued success.

The company boasts over 158 million daily active users who create 2.5 billion "snaps" a day in 20 different languages, generating an expected $936 million in revenues in 2017, according to a report by venture equity firm Goodwater Capital. The report reads, "Snapchat is well-positioned to scale rapidly and take market share in the $652 billion global advertising market."

However, some aren't so enthusiastic about Snapchat's potential, referencing Twitter, which has struggled to grow its user-base since its 2013 IPO, and now trades well below its offering price.

There are concerns that Snapchat's user engagement has peaked and could become stale, according to Lou Kerner, manager of the Social Internet Fund and a partner in the venture investment firm Flight VC.

"We know all products have life cycles – you can look at Twitter for a lesson," he said. It isn't a good sign that Snap's IPO didn't include details about historical trends for user metrics, he added.

Published in Finance

Snap Inc. the parent company of the popular social networking app Snapchat filed public documents for a share offering on February 2, ending speculation that the company would seek an IPO. Snap Inc. reportedly hopes to raise up to $3 billion in its highly anticipated Wall Street debut.

California-based Snap Inc. had earlier filed confidential documents for an initial public offering last year. The Wall Street Journal reported in October that Snap Inc. was preparing for a 2017 share offering, which would bring to Wall Street one of the most prominent of the venture-backed tech ‘unicorns’.

Snap’s IPO was expected to be one of the most significant tech company IPOs in recent years with a valuation, according to AFP, likely to top $20 billion. In documents filed with the Securities and Exchange Commission, Snap Inc. said it took in $404 million in revenue last year, but lost $515 million.

The company is famous for Snapchat, the app which features disappearing photo and video messages. To expand its offering and generate revenue, Snap allowed publishers to deliver content through the platform.

Some of the many publishers that Snap has partnered with include CNN and the New York Times. According to the company’s filing, 158 million people use Snapchat daily, and over 2.5 billion Snaps are created every day. Like other social media platforms, Snap said it expects to derive most of its revenue from advertising. The company will thus compete against rivals Facebook and Twitter.

However, Snap Inc. noted that since its inception it has been losing money and “may not achieve or maintain profitability.” Nevertheless, Snap’s offering on the New York Stock Exchange is the largest for a technology company in the US since Chinese e-commerce company Alibaba listed in 2014.

The IPO documents did not provide share pricing and noted that the amount to be raised could be revised before the market debut, which is likely to take place in March.

While some analysts say Snap has the potential to challenge Facebook, others say it could end up like Twitter, which consistently lost money and whose existence as an independent firm is in peril because of its inability to grow its user base.

The value of Snap Inc. has been labeled “hyper-inflated” by Global Equities Research analyst Trip Chowdhry who advised investors in a note to steer clear of the IPO.

“We are at the tail end of social-media boom - novelty is giving way to fatigue,” Chowdhry said. “Durability is absent in SnapChat - it's the next Groupon, the next Zynga, the next GoPro, the next FitBit.”

All of the companies he listed lost momentum after public debuts accompanied by high expectations. The Snap IPO will be structured with different share classes, allowing co-founders Evan Spiegel and Bobby Murphy to control 88.6 percent of the voting rights.

 

  

 

Published in Finance