Uber Technologies, Inc. may have done the right thing by offering guidance for positive Ebitda for the full year in 2021, but there remains a serious negative catalyst on the immediate horizon: the expiration of a shareholder lockup on Wednesday. That’s according to IPO Edge Editor-in-Chief John Jannarone, who spoke to Cheddar TV about Uber’s prospects as the company reported results Monday night. Jannarone pointed out that nearly $20 billion of shares could hit the market as early private investors take advantage of a right to sell on the open market. Other recent IPOs including Beyond Meat, Inc. have seen their stocks battered when insiders got the chance to sell. And while Uber has’t performed as well as Beyond Meat, many early investors are still in the black from purchases made years ago and will want to diversify, he said.
Jannarone also weighed in on results from Shake Shack Inc., whose shares fell sharply after it posted weaker-than-expected same-store sales. One problem for Shake Shack is maintaining strong sales in stores it opens in smaller markets, where the initial novelty of the experience drives early sales but traffic tends to fall off in the medium term.