Uber just included Postmates to its portfolio.
The ride-hailing company accepted buy the food-delivery service on Monday for $2.65 billion in an all-stock offer. The news added to Uber shares’ recent gains, rallying 6%on top of a 25%rise in the previous 3 months.
Danielle Shay, director of options at Simpler Trading, said Uber is not on her buy list.
” Uber is among the IPOs in the market that we have actually seen that has actually been a laggard for most of the year,” Shay informed CNBC’s “ Trading Country” on Monday.
While Uber rallied in the second quarter, it has actually trailed the remainder of the IPO stocks, names that have actually been public for less than 2 years. Uber is up 9%this year, while the IPO Renaissance ETF has surged 35%.
” The acquisition of Postmates is top, costly. Number two, the market share that Postmates has is extremely small especially compared to DoorDash, and I believe when you’re looking at this and thinking is this going to be the straw that gets Uber out of this hole? I don’t think so,” stated Shay. “Uber is a short on this news. I think you can short it around $35 and if it trades as much as $40 I think I would short it there also.”
Uber closed Monday’s session at $3252 a share.
Ari Wald, head of technical analysis at Oppenheimer, is not as bearish on the stock. He sees continued momentum behind IPO stocks, consisting of Uber.
” We do think it must be supplied a tailwind with the strength IPOs in general. It’s an 8%weighting in the Renaissance IPO ETF– that IPO ETF rates positively in our momentum work. We think it continues to lead,” Wald said during the exact same section.
Wald added that the hot IPO market may not be as frothy as some fear.
” Take this for example, that IPO index is up 25%over the last 12 months, however for comparison purposes, it was up over 300%into the year 2000 peak. A real far cry from that, a much steadier ascent, strong but not too strong, we think it continues,” stated Wald, basing the historic contrast on a composite of the IPO ETF and Bloomberg’s IPO index.
Correction: An earlier variation of this story offered an inaccurate price for the Uber-Postmates deal. It was $ 2.65 billion.
source https://jobsearchtips.net/ubers-postmates-deal-one-trader-states-its-time-to-short-the-stock/
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