Uber‘s future is still “bright” despite the ride-hailing company’s dismal debuted last week on the New York Stock Exchange, former GM Vice Chairman Bob Lutz told CNBC on Monday.
Shares of Uber were down more than 5% in premarket trading Monday after dropping 7.6% in its debut session Friday when it closed below $42 per share and finished the day with a market cap of $69.7 billion. It was one of the worst first-day performances ever for a high profile initial public offering and followed a poor performance from rival Lyft shortly after it began trading on the public market in late March.
Lutz, who said he has an investment in Uber, isn’t worried about the stock and characterized the Friday share performance as “just a blip.” Instead, investors should pay attention to investments from Uber that will create huge profits in the future like self-driving technology, Lutz said.
“It’s basically operating like an autonomous robotaxi fleet, except there is still drivers,” Lutz said in a “Squawk Box ” interview. “People who use Uber are extremely pleased with it. I think the future is bright.”
An investment in Uber has been seen by some as a bet on self-driving technology.
Uber’s self-driving unit has been met with trouble but has been moving ahead and last month announced a deal for a $1 billion investment in its unit. Uber CEO Dara Khosrowshahi has also made the case that Uber is a complicated business consisting of many potential growth areas, including, someday, self-driving cars and even flying cars.
Paul Ingrassia, an editor at the Revs Institute for Automotive Research and a Pulitzer Prize-winning journalist, agreed with Lutz’s assessment about Uber’s stock price. However, speaking in the same interview, Ingrassia wondered how Uber would satisfy investors in the near term while it improves its self-driving technology.
“Autonomy is going to take a decade to pan out,” Ingrassia said. So, what is the solution to this in the near-term for investors? I don’t see it.”
Author: Berkeley Lovelace Jr.