Expect ‘another year or more of pain’ for Uber: author

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Uber’s journey from a hot-shot unicorn to a newly public company struggling to find its footing has been very frustrating for Wall Street investors. And one tech insider says investors better buckle up their seatbelts because it will be at least another year before Uber (UBER) turns the corner.

In his new book “Super Pumped: The Battle for Uber,” New York Times technology correspondent Mike Isaac gives a glimpse into Uber’s rapid rise in Silicon Valley and its subsequent struggle to stay dominant in the wake of its recent IPO.

“There was so much hype around Uber as a private company for so long, and they have to prove that they really are this world-changing business,” Isaac said on Yahoo Finance’s The Final Round. “And I think there is going to be probably another year or more of pain to get there.”

Uber shares touched a record low on Tuesday, closing down 5.7% to $30.70 and falling below its previous low of $32.57 on August 30. As of Tuesday’s close, the company traded more than 30% below its May IPO price of $45 per share as investors continued to question Uber’s path to profitability.

Uber since IPO: The ride-sharing company has had a bumpy ride in the public markets, with the stock trading about 30% below its May IPO price of $45 per share as of Tuesday's close.
Uber since IPO: The ride-sharing company has had a bumpy ride in the public markets, with the stock trading about 30% below its May IPO price of $45 per share as of Tuesday's close.

Uber’s windy road to public markets

Uber’s new reality as a public company is a stark contrast to what Isaac calls Uber’s “glory days” of the early 2010s when the company was sealing billion-dollar financing deals and promising to transform the transportation industry.

“I think Uber came up in a very different time than we're in right now,” said Isaac, who began covering Uber for the New York Times in 2014. “If you remember back in 2010, 2011, 2012, they were raising like billion dollars every other month. It just seemed like their war chest kept getting bigger, their opponents weren't really that well-funded, and Lyft (LYFT) was basically at death's door.”

But just a few years later, Isaac says Uber was “on a collision course with itself,” with 2017 turning into “one of the worst years of sustained crises for any corporation in the history of Silicon Valley” as the company dealt with sexual harassment scandals, regulatory setbacks, increased competition, and a toxic corporate environment under the tumultuous leadership of founder Travis Kalanick.

The timeline of Uber's rise from a small start-up in 2009 to a Silicon Valley giant with a $53 billion market cap.
The timeline of Uber's rise from a small start-up in 2009 to a Silicon Valley giant with a $53 billion market cap.

“And then 2017 happened, and everything just took a dive in terms of their reputation, in terms of competitors coming in and getting much more funding,” Isaac said. “And it just seems like they have a lot more opponents to face now than they did before, so it's a very different fight and it's a much harder story to tell the Street when your valuation is already super high as a private company.”