With Uber set to go public on the New York Stock Exchange on May 9, and other high-profile tech companies touted to do so later this year, speculation remains about the promise of equities in the peer-to-peer economy, according to AXA Investment Managers (AXA IM) Framlington Equities.
Although any IPO offers a new opportunity, “patience and selectivity are crucial when deciding whether to invest”, said the firm’s head of global equities Mark Hargraves.
“While being an early investor in a company or technology can offer some initial or short-term upside, not all opportunities will be profitable,” he added.
When Facebook went public, AXA IM Framlington Equities waited “four full quarters before investing”, Hargraves said. The firm followed Facebook’s IPO to ensure there was commercial proof of its advertising platform.
In Uber’s case, “there are still questions over the current car-sharing model, the economics of which are not immediately or obviously attractive for sustainable, long-term investment.”
Hargraves highlighted that consumers had other options when it came to car sharing.
“Until Uber finds a more sustainable path to profitability, we see a number of other ways to access the mobility theme, particularly as we wait to see the role that automation can play.”
Other tech companies set to go public include Airbnb, Pinterest, Bumble, and Cloudflare.
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