Uber's CEO Invested $10 Million in the Company's Shares, Which Had Fallen in Price
This is the second insider trade involving the company's securities this week
The CEO of Uber purchased 141,000 shares of the company. Photo: DenPhotos/Shutterstock
On September 10, Dara Khosrowshahi, CEO of the technology company Uber—best known for its ride-hailing app—purchased approximately $10 million worth of the company’s stock. The news caused the stock price to surge. Uber’s stock has fallen significantly over the past month amid growing competition in the autonomous taxi market.
What is known about the purchase
Khosrovshahi purchased 141,000 shares at an average price of $70.96, according to Form 4 filed with the U.S. Securities and Exchange Commission. As a result, his total stake increased to 1.367 million shares, which are now valued at approximately $100 million. This is Khosrowshahi’s first purchase of Uber shares on the open market since May 2022, Barron’s notes.
According to the regulator’s rules, corporate insiders have two business days to file Form 4 after completing a transaction, and most prefer to wait a day or two. Same-day disclosure of a purchase is quite rare, the publication notes.
This is the second transaction by Uber’s top management this week: On September 4, Chief Operating Officer Andrew MacDonald purchased 70,000 shares for approximately $5.3 million at prices ranging from $75.23 to $76.85 per share, according to Barron’s.
Both purchases signal that top management believes Uber’s stock is undervalued, the publication explains. The company’s current multiples are just 17 times its expected net income in 2027 and 11 times its projected free cash flow.
How did the market react?
Uber's stock surged during trading on September 10, rising as much as 3% at one point. By the close of trading, the stock was up 2.1%. In premarket trading on September 11, the stock gained another 1.4%.
In early August, the company’s stock plummeted by more than 5% following the release of a weak quarterly forecast, and it has lost 11% of its value since the beginning of the year. This is due to investor concerns: they fear that new self-driving taxis from Waymo and Tesla will pose stiff competition and take away part of Uber’s market share, Barron’s explains.
Wall Street views Uber’s outlook positively: 47 out of 56 analysts recommend buying the company’s stock, while eight recommend holding it. Only one sell recommendation has been issued. The average price target is $101, which implies growth potential of more than 40% relative to the last closing price.
This article was AI-translated and verified by a human editor
