Many parents of Millennials gave their kids a lesson about the stock market: “Buy the things you know.”
Transportation company Uber Technologies Inc (NYSE: UBER) is one a lot of Millennials know, and they’ve snapped up its shares enthusiastically since the company’s stock debuted in May, according to TD Ameritrade data. However, UBER—which reports earnings after the close of markets this Thursday—hasn’t necessarily convinced veteran market analysts that it can find a way to reach profitability.
There’s a different sort of pressure when a company goes public, and UBER is finding that out. Once you’re public, people expect you to make money.
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Despite the big Millennial interest, UBER’s stock hasn’t come close to matching the market performance of some other recent initial public offerings (IPOs). The stock dropped more than 7% on its opening day, and now nearly three months later, still trades well below the IPO price of $45.
Earnings come as UBER wrestles with a couple of recent challenges. First are some micro issues, as the company announced last quarter that its chief operating officer and chief marketing officer were both leaving. UBER also cut one-third of its marketing staff, or about 400 employees. That’s not usually a sign of things going swimmingly, though it might help reduce costs.
Then, even more recently, media reports surfaced that UBER was likely to get a short-term extension of its license in London, not a five-year one. A short-term license would allow UBER to keep operating there for another two years, but it isn’t necessarily a ringing endorsement of the company from one of its key markets. The license in London is temporary and expires next month.
Economic worries are also growing for the entire global