Tech unicorns are losing their sparkle

The post-IPO performance of Uber and Lyft shares shows a new level of investor scepticism towards tech ‘unicorns’. It’s about time.

  • By Lewis McLellan, Sam Kerr
  • 16 May 2019
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Uber’s share price has recovered after early selling and is back at its IPO price, which was the bottom of the range it was marketed at. That is far below the double-digit gains which investors expect in the early days of a tech unicorn trading. Meanwhile, Lyft is still 23% below its IPO price.

Uber’s roadshow was full of bold promises and high ambitions to rival Amazon as a logistics and delivery company. 

The company has always been ambitious, but its fundamentals — not its dreams — are important to IPO investors. No amount of ambition can hide the fact that Uber is still loss-making and that its road to profitability depends on driverless vehicles — a promising, but nascent technology fraught with all sorts of perils.

It was unlucky to be in the market at the same time as renewed trade hostility between the US and China, but the startling lack of early conviction investors have shown in the stock illustrate fragile confidence.

The stock’s performance indicated a difference in focus between private and public investors. While private investors were happy to buy Uber stock at ever-more astronomical valuations based on the company’s lofty promises, once the stock went public, IPO investors showed scepticism.

Investors are eager to play with the next member of the Faang club — Facebook, Apple, Amazon, Netflix and Google — but they risk being bitten. Uber, Lyft and Snap are just three of the companies that have caused investors to wince.

Big tech could do with delivering for shareholders to justify astronomical valuations. Instead of farting rainbows, they should prioritise laying a few gold bricks.

  • By Lewis McLellan, Sam Kerr
  • 16 May 2019

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 227,365.29 1021 8.28%
2 Citi 211,404.92 882 7.70%
3 Bank of America Merrill Lynch 176,375.36 735 6.42%
4 Barclays 164,503.56 674 5.99%
5 HSBC 136,422.24 745 4.97%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 27,431.07 110 7.85%
2 Credit Agricole CIB 25,823.81 106 7.39%
3 JPMorgan 21,834.93 53 6.25%
4 Bank of America Merrill Lynch 21,382.31 54 6.12%
5 SG Corporate & Investment Banking 16,786.71 79 4.80%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Morgan Stanley 7,509.08 37 9.67%
2 JPMorgan 7,363.27 46 9.48%
3 Goldman Sachs 6,842.44 35 8.81%
4 Citi 5,763.97 41 7.42%
5 UBS 4,691.07 23 6.04%