Uber stock hits a new low as lockup period ends

Uber shares fell to an all-time low Wednesday as its stock lockup period ends.

The end of the lockup period, which is 180 days after the company’s lackluster IPO, means that insiders, including early investors and employees, are free to sell shares. It comes just after Uber released its third quarter earnings report on Monday, where the company continued to report steep losses, while providing more transparency by breaking out metrics for its various business lines.

Uber shares hit a record low of $25.58 when the market opened Wednesday after hitting a previous low of $27.97 on Tuesday. Shares bounced back to nearly $27 per share, or 40% lower than its IPO price of $45.

“We believe it will be a avalanche of selling from early investors and insiders as this train wreck since the IPO continues,” said Dan Ives, an analyst at Wedbush Securities. “We estimate roughly 763 mm shares will be unlocking with roughly 25% at a big risk of selling over the coming days. It’sr been dark days for Uber but after this week, the lockup overhang will be in the rear view mirror and the stock should rebound from here.”

Since going public in May, Uber has struggled to win over investors who are concerned about the company’s history of losses and newer concerns about the viability of its Uber Eats business. As the company faces pressure to clean up its finances, it has restructured its operations. The company has gone through two rounds of layoffs since its IPO, with the most recent round in September impacting 435 positions on its product and engineering teams.

Meanwhile, as the lockup period expires, some of the company’s drivers are planning to protest outside the homes and offices of some key Uber investors in California on Wednesday. The protest follows other driver strikes this year, both leading up to, and after, the company’s IPO.

Both Uber and competitor Lyft have built their businesses on the backs of drivers. Like some other gig-economy companies, the two have long argued their drivers are independent contractors. That status has meant workers aren’t guaranteed the same rights as employees, such as a minimum wage, overtime, workers’ compensation, unemployment insurance, paid sick leave or on-the-job expenses. For the companies, paying drivers is the biggest cost they can control. The two companies are helping foot the bill for a ballot measure that would exempt them from new California legislation, AB-5, that could make it more difficult to classify their drivers as contract workers.

“These protests will shine a light on the difference between investors who make billions, and drivers who make less than minimum wage, putting in countless hours and watching their cars depreciate in value every additional mile they drive,” said Gig Workers Rising, an organizing group behind the driver strike dubbed “Deactivate Uber Billionaires,” in a tweet about the planned protests.

“This is the day when a handful of investors are likely to extract huge profits,” read another tweet from the group, which is calling on policymakers to “pave a way for drivers to unionize.”