Uber's long and bumpy road
A bad week to go public
https://www.cnn.com/2019/05/10/tech/uber-wall-street-debut/index.html
2019-05-10 15:04:00Z
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Stocks edged lower again on Wall Street, sending the S&P 500 down for its fifth consecutive day, as the Trump administration imposed fresh tariffs, escalating the trade war with China.
The benchmark American stock market index fell, led by declines in tech, energy and industrial shares.
Early Friday, the administration raised tariffs to 25 percent from 10 percent on Chinese imports that are worth about $200 billion a year. President Trump said the increase came in response to Chinese officials attempting to “renegotiate” a pact aimed at calling a truce in the trade war. China said it would respond with unspecified countermeasures.
Mr. Trump also said on Twitter that “there is absolutely no need to rush” on a trade deal, dampening hopes that an agreement would be reached quickly.
Still, the Trump administration effectively delayed the full brunt of the tariff increase, specifying that it would collect the duties only on goods that leave China starting on Friday. That means they will not hit Chinese products already on ships destined for the United States, though goods that are flown in will be more immediately affected.
“Our base case remains that the U.S. and China will eventually reach some kind of accord,” Mark Haefele, global chief investment officer for the Swiss bank UBS, said in a research note. “Both the U.S. and China have strong incentives to reach a deal, and we do not expect a complete breakdown in negotiations.”
Concerns about the ongoing trade battle between the world’s two largest economies overshadowed excitement over trading debut of Uber. The ride-sharing company priced its public offering Thursday, which valued it at more than $82 billion.
Shares in China, which sometimes gets a lift from state-run companies looking to buoy the market, rose sharply but gains elsewhere in the world were more muted. Futures that allow investors to bet on the performance of stocks in the United States indicated that stocks on Wall Street would open a little lower.
European markets were higher. The Dax in Germany was up 0.9 percent and the CAC 40 in France was 0.6 percent higher. The FTSE 100 in London rose 0.3 percent.
In China, the Shanghai Composite Index rose 3.1 percent, while the Shenzhen Composite Index rose 3.8 percent.
The Hang Seng Index in Hong Kong rose 0.8 percent. In Japan, the Nikkei 225 index fell 0.3 percent after disappointing wage data there. South Korea’s Kospi index rose 0.3 percent.
Uber CEO Dara Khosrowshahi told CNBC he agrees with Tesla CEO Elon Musk that the future of mobility is electric, but he disagrees with Musk that truly autonomous "robotaxis" will next year.
In an interview that aired on Uber's IPO day on Friday, "Squawk Box" co-host Andrew Ross Sorkin asked him what the future of mobility looks like.
"First of all, it's got to be electric," the CEO said. "We think that's a no-brainer. It's good for the environment. It's where the world is going. And we're playing our part, for example, in London to move it electric." He added that Uber, of course, thinks the future of mobility also has to be "shared."
The ride-hailing giant will make its debut on the New York Stock Exchange on Friday, pricing its IPO on Thursday night at $45 per share.
Tesla CEO Elon Musk recently told investors he is ready to take Tesla into a new, driverless era. The company should have a million vehicles capable of functioning as driverless robotaxis on the road by the end of 2020, he said. He also told investors that self-driving technology and services will help his electric car company grow to a $500 billion market cap.
When the Uber CEO first heard Musk's predictions about this, Khosrowshahi said, "I thought: If he can do it, more power to him. Our approach is a more conservative approach as far as sensor technology and mapping technology. The software's going to get there. So I don't think that his vision is by any means wrong. I just think we disagree on timing."
Musk has also promised investors and fans that Tesla's self-driving cars will be able to work 100 hours a week, generating tens of thousands of dollars in income for their owners. He has also said that Tesla should be able to win regulators over to approve Tesla robotaxis for commercial use in the near future, at least in some locales.
Tesla and Uber have seen their semi-autonomous vehicles involved in fatal crashes in recent years.
Khosrowshahi struck a more sober tone about a driverless future.
"I think it will be quite a few years beyond," he said.
While media coverage and industry conversations have focused on the dramatic notion that robots will steal jobs from people, the Uber CEO said he believes automation will always work better to augment humans' work. The better things are robots and humans together. Hybrid is always better, and hybrid states can continue for a much longer period than you think."
In addition to its sizable ride-hailing business, Uber offers bike and scooter rentals, food delivery and operates a freight marketplace that links senders to shippers. Uber is developing self-driving vehicle technology through its Advanced Technologies Group.
Post-IPO Uber has a market capitalization over $80 billion. Tesla's market cap currently stands around $43 billion.
Check out the companies making headlines before the bell:
Marriott — The hotel operator earned an adjusted $1.41 per share for the first quarter, 7 cents a share above estimates. Revenue missed forecasts, however, but Marriott said it was able to increase North American profit margins despite higher labor costs and modest revenue growth.
Viacom — Viacom reported adjusted quarterly profit of 95 cents per share, beating the consensus estimate of 80 cents a share. Revenue was below forecasts, however. Viacom said its results were helped by significant gains in program distribution. Separately, Viacom agreed to slash its fees for distribution in its recent deal with AT&T's DirecTV unit, according to people familiar with those negotiations who spoke to The Wall Street Journal.
Equifax — The credit reporting agency matched estimates with adjusted quarterly profit of $1.20 per share, but revenue missed forecasts and the company's second-quarter earnings outlook falls below consensus. Equifax said costs related to the data breach announced in 2017 have now totaled $1.35 billion.
Uber — Uber priced its initial public offering at $45 per share, toward the low end of the expected range. Nonetheless, the ride-sharing service's IPO will raise $8 billion, making it the largest U.S. IPO since Facebook went public in 2012.
Booking Holdings — Booking Holdings earned an adjusted $11.17 per share for its latest quarter, 10 cents a share below consensus forecasts. Revenue also missed estimates, but the parent of Priceline and other travel services said it should see revenue growth this quarter.
Dropbox — Dropbox beat estimates by 4 cents a share, with adjusted quarterly profit of 10 cents per share. The file storage company's revenue came in ahead of expectations, as well. Dropbox signed up more paying users during the quarter, and also posted an increase in revenue per user.
Wynn Resorts — Wynn reported adjusted quarterly earnings of $1.61 per share, a penny a share ahead of consensus. The casino operator's revenue was very slightly below estimates amid a drop in Macau casino action.
Zillow — Zillow lost 33 cents per share for the first quarter, smaller than the 35 cents a share loss that Wall Street analysts had been expecting. The real estate website operator's revenue beat forecasts, increasing 51% compared to a year ago. It also saw an increase in unique monthly users.
Symantec — Symantec shares are under pressure after the cybersecurity software company's chief executive officer unexpectedly resigned, and it issued a profit warning for the current quarter. Director Richard Hill, who will fill the CEO slot on an interim basis, said former CEO Greg Clark had issues with an ill parent.
Yelp — Yelp earned 2 cents per share for the first quarter, compared to consensus estimates of a penny a share. The consumer review website operator also had higher-than-expected revenue. Yelp gave weaker-than-expected revenue guidance for the current quarter, however, and said unique visitors to its desktop and mobile sites had declined during the first quarter.
Anheuser-Busch InBev — The beer brewer filed to spin off its Asian business in a Hong Kong-based initial public offering Sources who spoke to Reuters say the deal could be worth at least $5 billion.
TiVo — TiVo will split itself into two separate companies, one for its product division, the other for intellectual property licensing. The maker of set top boxes and digital video recorders has been exploring options for its businesses for more than a year.
News Corp. — News Corp. reported adjusted quarterly profit of 4 cents per share, compared to forecasts of a breakeven quarter. The media company's revenue came in below estimates. The bottom line was helped by an increase in digital subscriptions for the Wall Street Journal and New York Post publisher, as well as expansion at its digital real estate businesses.
Boston Beer — Boston Beer will buy rival craft brewer Dogfish Head Brewery in a $300 million cash and stock deal. Both Dogfish and Boston Beer — the brewer of the Sam Adams brand — have been battling declining sales in recent years.
GoPro — GoPro reported an adjusted quarterly loss of 7 cents per share, 2 cents a share smaller than expected. The high definition camera maker's revenue beat estimates. GoPro also raised its full-year revenue forecast amid high demand for its new line of action cameras.
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Party City closing 45 stores in light of global helium shortage WJW FOX 8 News ClevelandParty City announced Thursday it will close 45 stores across the country this year in light of a global helium shortage. The company currently owns 870 locations.
View full coverage on Google NewsTOKYO (AP) -- Global stock markets were mostly higher on Friday in volatile trading as investors appeared to hope that the United States and China might yet reach a deal to solve their escalating trade war.
France's CAC 40 gained 1.0% to 5,3634, while Germany's DAX added 1.2% to 12,121. Britain's FTSE 100 rose 0.5% to 7,244 after some upbeat first quarter growth figures. U.S. shares were set to open lower, with Dow futures slipping 0.1% and S&P 500 futures shedding 0.3%.
The Shanghai Composite index surged 3.1% to 2,939.21 while the A-share index in the smaller market of Shenzhen jumped 3.8%. Traders said that was mainly because Chinese institutional investors stepped up buying to support the country's financial markets.
China's Commerce Ministry said would take unspecified "necessary countermeasures" after the Trump administration raised duties on $200 billion of Chinese imports to 25% from 10%. The action came as trade negotiations were underway in Washington.
"Investors are still clinging to the hope that the U.S. and China will eventually manage to agree some sort of deal," analysts at financial firm Rabobank said in a commentary.
Hong Kong's Hang Seng gained 0.8% to 28,550.24, while Japan's Nikkei 225 slipped 0.3% to finish at 21,344.92. Australia's S&P/ASX 200 rose nearly 0.3% to 6,310.90. South Korea's Kospi gained 0.3% to 2,108.04 and India's Sensex edged 0.3% higher to 37,681.09. Shares fell in Taiwan but recovered in Thailand.
Analysts said China could raise tariffs on some U.S. exports, though the amount would not match the costs imposed by the increase in U.S. import duties. It could step up interference in U.S. companies' deal-making and other areas.
The increased tensions, if not resolved soon by a deal between Beijing and Washington, could hurt growth across the region and beyond, said Rajiv Biswas of IHS Markit.
"The escalating U.S.-China trade war adds to significant existing headwinds already facing the Asia-Pacific region from a range of factors, including the sharp slowdown in global electronics new orders and weak new orders in the eurozone manufacturing," Biswas said.
ENERGY: Benchmark U.S. crude rose 33 cents to $62.03 a barrel in electronic trading on the New York Mercantile Exchange. It dropped 0.7% to settle at $61.70 per barrel overnight. Brent crude, the international standard, added 42 cents to $70.81 a barrel.
CURRENCIES: The dollar inched up to 109.79 Japanese yen from 109.77 yen. The euro strengthened to $1.1232 from $1.1216.
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