Nightmarish debut by Uber complicates tech listings

A nightmarish debut by Uber Technologies Inc. complicates listing plans at other tech unicorns, particularly the breed of large-cap tech companies that counts WeWork Cos. as a member.

Traders have made clear that IPOs by large, hyper-capitalized technology companies with opaque fundamentals and massive losses will face scrutiny. That’s the big lesson from Lyft Inc. and Uber’s disappointing debuts, according to a research firm that focuses on tech listings.

“Two points make a line,” Triton Research Inc. wrote in a note to clients. “WeWork recently announced it had filed to go public later this year and we can now safely wonder if they will have the courage to go through with it.”

Triton warns that WeWork Cos.’s loss profile is even worse than Lyft’s and more closely resembles that of another doomed IPO — Snap Inc. WeWork “may need a new plan” after Uber proved investor appetite for these types of listings is weaker than expected. Airbnb Inc. could also fall into this category.

But technology firms with more solid financial footing, such as Slack Technologies Inc., don’t need to tap the brakes on their listing plans.

Slack, which added a quarterly forecast to its prospectus on Monday, is in a financially advantageous position to go public.

It has years of cash runway on its balance sheet, Triton says, which helps explain why the firm is opting for a direct listing rather than a traditional IPO.

Recent tech IPOs with healthier financials have been surging, including Zoom Video Communications Inc., DocuSign Inc., Elastic NV and Zscaler Inc.

Uber shares closed on Monday 18% below Thursday’s IPO price, which had already come in near the bottom of its offering range.

Now read: Uber raises $8.1 billion in IPO

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Nightmarish debut by Uber complicates tech listings