n advance of the company’s initial public offering, Uber’s top executive isn’t worried about an erratic Wall Street or a possible looming economic recession
and believes a slowdown could benefit the ride-sharing behemoth.
U.S. stock markets have experienced significant swings in recent weeks amid uncertainty over whether the Federal Reserve would seek to raise interest rates further and concerns about U.S.-China trade relations. Among the hardest hit was the technology sector, which is suffering from higher costs due to President Trump’s tariffs on $250 billion in Chinese products.
But the volatility is not cause for alarm for Uber, which plans to open up its stock to outside investors as soon as the second half of 2019. CEO Dara Khosrowshahi told the Wall Street Journal
the company is “large and flexible enough to go public in almost any market.”
“Any company that’s going public would like to do it in a positive, stable market,” he said. “We’ll do it when we’re ready, and, hopefully, the markets will be in a good state.”
While some industries are projecting confidence
going into 2019, Federal Reserve Chairman Jerome Powell
, former government officials, and economists
have all warned that U.S. growth could moderate in the coming months.
“The odds are now better than 50/50 that we’ll have a recession in the next two years,” former Treasury Secretary Larry Summers told CNBC
on Monday. Financial market conditions “are flashing very cautionary signs. There’s lot of signs of economic difficulty in China.”
While the U.S. economy grew at a 3.4 percent clip in the three months through September, Trump’s tariffs on Chinese goods, as well as double-digit levies on steel and aluminum imports, have created obstacles. Top companies such as Apple have already warned that earnings will be lower
in the fourth quarter as a result.
But Khosrowshahi believes a slowdown might benefit Uber since more individuals would likely seek work driving for the company. Economic woes in Brazil bolstered Uber’s workforce there, he said.
While Uber filed paperwork confidentially with the Securities and Exchange Commission late last year, Khosrowshahi said the company has “a strong balance sheet” and would be fine if its public stock offering were delayed.
Rival company Lyft also submitted initial paperwork in 2018, teeing up a battle between the ride-sharing giants on what are expected to be two of the biggest IPOs of the year.