May 13 (Reuters) - Uber Technologies Inc shares were set to fall another 7% on Monday, doubling losses since its poorly-received Wall Street debut on Friday and raising more questions about investors’ faith in its ability to make profits.
The move, which came in a wide-ranging sell-off on global financial markets spurred by more U.S.-China trade tensions, pointed to shares opening at $38.54, valuing the company at almost $11 billion less than Friday’s debut price of $45.
Before going public, Uber lowered its valuation expectations twice in two months to address investor concerns over the company’s mounting losses, and priced its initial public offering at the low end of the targeted range.
Rival Lyft Inc, which went public at $72 a share on March 29, has lost a third of its market value since and was down 3% at $49.50 in trading before the bell.
Both IPOs took place against a backdrop of renewed concerns on Wall Street over global growth due to the trade tensions, although U.S. stock markets are all currently far higher than they were at the end of last year.
“The current narrative relating to the social economic nature of the ride-hailing segment is negatively having an impact on the shares of both UBER and LYFT,” said Zephirin Group analyst Lenny Zephirin.
While both companies are trying to find ways to lower driver costs to become profitable, drivers went on a protest in several U.S. cities earlier this month demanding job security, livable incomes and a cap on the amount ride-hailing companies can collect from fares.
Wedbush analyst Ygal Arounian said investors need to be patient as Uber reaches full monetization potential with its ride-sharing platform and a broader growth engine with Uber Eats, Uber Freight and autonomous driving initiatives.
“While it will take time for the stock to settle and Uber must execute flawlessly over the coming 12 to 18 months we believe a $100 billion+ market cap is warranted,” Arounian said.
Both Zephirin and Wedbush have top ratings on Uber stock. (Reporting by Supantha Mukherjee and Sayanti Chakraborty in Bengaluru; editing by Patrick Graham)