Party City is facing a helium shortage. It's also closing 45 stores - CNN

Balloons are big business for Party City (PRTY). The company's mylar balloon sales fell 8% last quarter, dragging overall sales down 1.4% at Party City stores open at least a year. Sales would have risen if not for the Party City's balloon problems, the company said Thursday.

Filling balloons with helium is among the company's most profitable services, according to Barclays' Matt McClintock. Helium brings people into the store, and those customers usually buy other items instead of buying on Amazon (AMZN) or at another store. But with the earth's (and Party City's) helium supplies dwindling, potential balloon customers have been searching elsewhere for party goods.

Party City also said it will close 45 stores this year. That's triple the number of stores the company typically closes in any given year. In a worrisome sign, almost all of those stores are profitable, the company said. The company is closing the stores to boost overall profitability, hoping customers will shop at nearby Party City stores. It has about 900 across North America.

Wither the world's helium?

Earth has been running out of helium for several years. Helium is formed by the atom-smashing power of the sun and other stars. But on Earth, helium is a finite resource.

The Earth holds pockets of helium buried under rock, but it's notoriously hard to capture because it, well, floats. When drilling or fracking for natural gas, energy companies capture some helium and sell it. But helium makes up a tiny percentage of the gasses trapped under rock formations.

Over the past few years, some drillers have claimed to find troves of helium buried underground, but those haven't always panned out. Party City said it really started feeling the pinch in August 2018.

Good and bad news for Party City

The good news for Party City is it signed an agreement with a new helium supplier. Party City believes the new supplier can help it return its balloon business back to normal starting in the summer, and it hopes the supplies will last for the next two-and-a-half years.

"We believe this new source should substantially eliminate the shortfall we are experiencing," said Party City CEO James Harrison in a statement.

The bad news is Party City said its helium shortage will continue through the spring. That's bad timing: May is a big month for balloons.

"Obviously graduation is a big season for balloons, no doubt about that," said Harrison on a conference call with Wall Street analysts Thursday.

And once Party City gets its helium back, its new supplier will charge more than its last provider. So it will have to raise balloon-filling prices.

Helium still remains cheap, and Party City doesn't expect the higher prices to hurt sales in the long-run. It may also be able to eat some of that cost over time, Harrison predicted. But he said higher helium prices may be here to stay.

"Over time, will helium come back down in price? Nobody knows. We'll see," Harrison said.

Harrison cautioned, however, that the additional helium wasn't a sure thing. Party City's new supplier might believe it is sitting on a lot of helium, but it can't know for sure until it bottles and sells it.

"Mother nature will ultimately determine whether or not those fields have the adequate amount helium to reach the goals that we've set," Harrison said. "We feel very comfortable that the expectations and the estimates made are solid."

Still, the stock price soared 10% Thursday, because investors were pleased that Party City was able to secure another helium supplier. The stock fell 3% Friday, dragged down by the broader market.

Correction: An earlier version of this story incorrectly stated why Party City is closing 45 stores.

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2019-05-10 16:21:00Z
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Uber Stock Slides in Disappointing Trading Debut That Followed Muted IPO - The New York Times

Uber tumbled below its initial public offering price on Friday, a disappointing start for one of the most hotly anticipated debuts in years and one that’s sure to raise concerns for other money-losing start-ups poised to list their shares.

The ride-hailing firm’s shares opened at $42, almost 7 percent below the I.P.O. price of $45. Uber’s I.P.O. valuation of $82.4 billion makes the company one of the most valuable to go public in the United States, but was less lofty than had been anticipated before it began pitching its shares to investors.

Uber’s Share price

Change From I.P.O. Price

Major Shareholders		Share value
	SoftBank Vision Fund Japanese investment fund	0
	Benchmark Capital Venture capital firm	0
	Travis Kalanick Co-founder and former C.E.O.	0
	Garrett Camp Co-founder	0
	Saudi Arabia Public Investment Fund Sovereign wealth fund	0
	GV Venture capital arm of Alphabet	0
	Ryan Graves First C.E.O.	0
	Dara Khosrowshahi Current C.E.O.	0

Data delayed by at least 15 minutes. Note: Value of some stakes reflect stock sales at the time of I.P.O., based on offering price, in addition to current holdings.

Uber is the biggest company to emerge from an age of smartphone apps, which began just over a decade ago after Apple introduced the iPhone in 2007. While other companies have adapted their businesses to mobile devices, Uber was a mobile native from the start, letting people hail rides with the touch of a button on their smartphones.

Along the way, Uber changed how people move around, allowing millions of people with no taxi licenses to become drivers without taking them on as full-time employees, an arrangement known as “gig work” that has led to labor protests and lawsuits.

But the ride-hailing service’s road to the public market has been rocky. Last year, investment bankers said that Uber could be valued at $120 billion upon I.P.O., which would have made it the biggest American company ever to go public on an American stock exchange. But that number has declined in recent weeks amid questions of whether Uber can make money, and stock market gyrations, which have dented the company’s market debut.

That caution extended into the start of trading Friday, which may have reflected investors experience with rival Lyft. Lyft rose in its debut but has since fallen well below its I.P.O. price.

Uber’s debut also capped a volatile week for the markets. On Friday, the S&P 500 index was on track for its fifth consecutive daily decline and its worst weekly performance of the year amid worsening trade tensions between the United States and China.

Uber Is Going Public: How Today’s Tech I.P.O.s Differ From the Dot-Com Boom

Uber, Lyft and others going public this year are more established than their tech counterparts from the late 90s, but as some see slowing growth, there are questions about where they go from here.

Founded by Garrett Camp and Travis Kalanick in 2009, Uber began as a high-end black car service for the Silicon Valley elite. The app seized upon the introduction of the iPhone, which had an accelerometer, an electronic instrument used to measure changes in velocity, and later a global positioning system, which Uber used to help both drivers and riders navigate the world around them.

The app, first called UberCab, was born of Mr. Camp’s frustration at San Francisco’s lackluster transportation options and an unreliable taxi industry. After some urging, Mr. Camp tapped Mr. Kalanick to lead the company as chief executive.

Soon, UberCab became Uber and grew rapidly across the United States. Growth truly exploded when the company introduced UberX, a low-cost option that hooked customers with bargain fares and a near-ubiquitous service that spread quickly across the world.

By 2014, Mr. Kalanick’s company had moved from noun to verb. To “Uber” somewhere meant to catch a ride, even as competitors with identical offerings popped up across multiple continents. Mr. Kalanick, known for his competitive spirit and no-holds-barred approach to capitalism, raised billions in venture capital, building a war chest to battle his rivals with subsidized, artificially lowered ride fares. By 2016, Uber’s valuation had soared well north of $60 billion.

[Meet the semiretired millennials who left California for low-tax, low-stress places like Texas, as their former start-ups stampede toward the stock market.]

The company ran into trouble in 2017. After years of cutthroat business tactics and a raucous culture rife with partying, harassment and other illicit behaviors, Uber’s reputation caught up to it. Mr. Kalanick was beset by multiple personal scandals, culminating in his eventual ouster.

Since then, his successor, Dara Khosrowshahi, a former chief of the online travel marketplace Expedia, has made it his goal to clean up the troubled company. His motto has been to always “do the right thing. Period.”

Who’s Getting Rich When Uber, Slack and Other ‘Unicorns’ Go Public

Highly valued tech start-ups are going public this year, and their debuts promise to generate big paydays for employees and investors. Here are what some of their stakes are worth at their I.P.O.s.

Mr. Khosrowshahi’s task is difficult. Though the company has spent millions to improve its brand, Uber’s reputation remains tarnished for some users. It must also improve its relationship with drivers, some of whom went on strike around the world on Wednesday to protest what they claimed were Uber’s unfair business practices.

[Here’s one man who has drive for Uber since 2012. He makes about $40,000 a year.]

And then there are the losses. Uber burned through nearly $2 billion in 2018 and does not expect to become profitable in the near future as it spends on ride-hailing and to expand into new businesses, such as Uber Eats, its food delivery service, and its autonomous vehicle development.

Mr. Khosrowshahi has not fully explained how Uber plans to eventually turn a profit. But he frequently compares the company to Amazon, the e-commerce giant that lost money for years as it diversified into other businesses before using its platform to turn a profit.

“What began as ‘tap a button, get a ride,’ has become something much more profound,” Mr. Khosrowshahi said in Uber’s paperwork to go public.

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https://www.nytimes.com/2019/05/10/technology/uber-stock-price-ipo.html

2019-05-10 15:54:59Z
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Uber stumbles in trading debut - CNBC

Uber began trading on the New York Stock Exchange Friday at $42 per share, below its IPO price of $45. The stock was down more than 2% toward the start of trading.

Uber priced its shares Thursday night toward the low end of its target range of $44 to $50 per share. That gave Uber a valuation of $75.46 billion at its IPO on a non-diluted basis, still well below the $120 billion it was reportedly seeking when news first broke it was preparing to go public. Toward the beginning of its trading, Uber's market cap was around $73 billion.

The stock began trading in the face of difficult market conditions Friday. The Dow Jones Industrial Average fell about 300 points after President Donald Trump said on Twitter "there is absolutely no need to rush" trade talks with China.

Uber's Chief Financial Officer Nelson Chai said "this was a tough day" on the market in an interview on CNBC after the stock began trading. Asked about whether executives considered delaying the IPO as a result of the conditions, Chai said, "I don't think that we're smart enough to try to judge the market ... We weren't optimizing to have the best opening price or the opening day. We're really looking for how the stock continues to trade over time and that's what we're building for."

Uber is now the second ride-hailing company to hit the U.S. public market, following Lyft's debut in March. Both companies have been heavily scrutinized for continuing to post big losses, but many investors are also intrigued by the entrance of the new industry onto the public exchange. As Uber began its first day of trading, Lyft's stock was down more than 4%.

Lyft's poor performance on the public market has somewhat dampened expectations over Uber's IPO, as Lyft's stock has plummeted more than 20% from its IPO price. Uber CEO Dara Khosrowshahi said in an interview with CNBC's Andrew Ross Sorkin on "Squawk Box" Friday that Lyft's performance "led us to be a bit more conservative."

But analysts saw a promising path to profitability in Lyft's first quarterly earnings report after the company showed strong growth in active ridership and revenue per active rider. Executives said on the earnings call Tuesday the ride-hailing market overall is beginning to become more rational, limiting the need for driver incentives.

Like Lyft, Khosrowshahi said 2019 should be the company's peak year for losses. Uber has been comparing itself to Amazon in its pitches to investors, which also infamously was not profitable at its IPO. While some analysts are dubious of the comparison, they also recognize investors' fear of missing out on the next big thing. In his CNBC interview, Khosrowshahi said he stands behind the comparison despite the differences between the two companies at their IPO.

"It's a fair comparison at the wrong time," Khosrowshahi said. "So a lot of private companies now are holding off much longer before they go public. We are much bigger, much more mature as a company as we go public, and if you do look at the growth rates, our audience is growing 33% on a year on year basis, transactions are growing 36%. To be able to grow transactions 36% on a $50 billion base is pretty incredible, and we hope to keep it going."

Khosrowshahi will be personally incentivized to keep up the value of the stock. If Khosrowshahi can keep Uber's valuation above $120 billion for 90 consecutive days once it goes public, Khosrowshahi will win net stock bonuses topping $100 million.

Even with shares priced toward the low end of its target range, Khosrowshahi is unconcerned with reaching those goals.

"I wasn't expecting it any time short term," he told CNBC. "I'm here to stay. I'm here to build a big company. That compensation term is not about a single day, it's about what value you create over 10 years, and over 10 years, absolutely I expect to get there."

One person who was missing from the dais at Uber's debut was its co-founder and former CEO Travis Kalanick. Kalanick, who was ousted from the company after accusations that he helped foster a hostile and inappropriate environment at the company, will be nearby with his father at Uber's start of trading on the floor of the NYSE.

Correction: A previous version of this article misstated the value of Uber CEO Dara Khosrowshahi's net stock bonuses if he keeps Uber's valuation above $120 billion for 90 consecutive days.

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Watch: Why Uber is losing money and what it will take to become profitable

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2019-05-10 15:50:57Z
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Uber CEO Dara Khosrowshahi emailed employees hours before the company's massive IPO. Here's what he said. - Business Insider

Uber CEO Dara Khosrowshahi signs the guest book at the New York Stock Exchange.AP Photo/Richard Drew

Uber CEO Dara Khosrowshahi sent a letter to company employees ahead of its May 10th IPO, reflecting on the company's decade-long history and how going public will impact Uber's future.

Uber executives including Khosrowshahi rang the opening bell on the balcony of the New York Stock Exchange on Friday morning as the company prepared to list its shares under the ticker symbol "UBER." The company has priced its IPO at $45 per share, giving the company an initial valuation of $75.5 billion.

In the full letter published by Bloomberg, Khosrowshahi talks about how Uber went from early test runs to providing billions of trips to customers around the world.

"Since our first trip in the summer of 2010 to today, Uber has redefined what it means to scale a startup -- from only a few cars and a handful of employees to operations in more than 60 countries, 10B+ trips, and 3.9M people finding work on our platform."

As a publicly traded company, Uber will now have to deal with increased public scruinty and quarterly earnings reports and calls with analysts, and Khosrowshahi said that will mean even more responsibility for Uber employees.

"We'll have an even deeper responsibility to our customers, to our shareholders, to our cities, and to each other. With every share purchased, someone else will join us as a co-owner of Uber– and we'll gain another person to whom we owe a duty to always 'do the right thing, period.'"

Uber drivers went on strike in more than a dozen cities on Wednesday to advocate for higher pay and better working conditions as the company's IPO approached.

Uber's IPO comes less than two months after its primary competitor, Lyft, joined the NASDAQ. Lyft went public with a $21 billion initial valuation but shares have dropped more than 20% in value since March 29th. Khosrowshahi and a handful of Uber executives were at the New York Stock Exchange on May 10th to ring the opening bell and shares of Uber will be available later in the morning.

Read the full letter from Uber's CEO over on Bloomberg.

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https://www.businessinsider.com/ubers-ceo-email-to-employees-before-ipo-2019-5

2019-05-10 14:37:31Z
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Party City closes dozens of stores amid global helium shortage - New York Post

Party City is having trouble staying afloat amid a global helium shortage.

The New Jersey-based party supply company announced Thursday it will close around 45 stores nationwide this year as it grapples with dwindling supplies of the critical gas.

Balloons have become more difficult to find at party stores as the helium reserves of some major suppliers in the US have been depleted. The demand for the gas is growing while about 75 percent of helium comes from three suppliers in the world, USA Today reported.

“This year, after careful consideration and evaluation of our store fleet, we’ve made the decision to close more stores than usual in order to help optimize our market-level performance, focus on the most profitable locations and improve the overall health of our store portfolio,” CEO James Harrison said in a release.

The company said it typically shutters 10 to 15 stores each year, but with the future of helium up in the air, it’ll be closing nearly 5 percent of locations.

The chain didn’t disclose whether any Big Apple locations would be affected — but closings have been reported in Connecticut, Illinois, California and Washington, according to USA Today.

Meanwhile, the party chain is scrambling to find new helium supplies.

“Most importantly, we have signed a letter of agreement for a new source of helium which, subject to final execution of a definitive contract, would provide for additional quantities of helium beginning this summer and continuing for the next 2.5 years,” Harrison said.

“We believe this new source should substantially eliminate the shortfall we are experiencing at current allocation rates and improve our ability to return to a normal level of latex and metallic balloon sales.”

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2019-05-10 14:28:00Z
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Stocks Edge Lower as U.S.-China Trade War Worsens - The New York Times

Stocks edged lower again on Wall Street, sending the S&P 500 down for its fifth consecutive day, as the Trump administration imposed fresh tariffs, escalating the trade war with China.

The benchmark American stock market index fell, led by declines in tech, energy and industrial shares.

Early Friday, the administration raised tariffs to 25 percent from 10 percent on Chinese imports that are worth about $200 billion a year. President Trump said the increase came in response to Chinese officials attempting to “renegotiate” a pact aimed at calling a truce in the trade war. China said it would respond with unspecified countermeasures.

Mr. Trump also said on Twitter that “there is absolutely no need to rush” on a trade deal, dampening hopes that an agreement would be reached quickly.

Still, the Trump administration effectively delayed the full brunt of the tariff increase, specifying that it would collect the duties only on goods that leave China starting on Friday. That means they will not hit Chinese products already on ships destined for the United States, though goods that are flown in will be more immediately affected.

“Our base case remains that the U.S. and China will eventually reach some kind of accord,” Mark Haefele, global chief investment officer for the Swiss bank UBS, said in a research note. “Both the U.S. and China have strong incentives to reach a deal, and we do not expect a complete breakdown in negotiations.”

Concerns about the ongoing trade battle between the world’s two largest economies overshadowed excitement over trading debut of Uber. The ride-sharing company priced its public offering Thursday, which valued it at more than $82 billion.

Shares in China, which sometimes gets a lift from state-run companies looking to buoy the market, rose sharply but gains elsewhere in the world were more muted. Futures that allow investors to bet on the performance of stocks in the United States indicated that stocks on Wall Street would open a little lower.

European markets were higher. The Dax in Germany was up 0.9 percent and the CAC 40 in France was 0.6 percent higher. The FTSE 100 in London rose 0.3 percent.

In China, the Shanghai Composite Index rose 3.1 percent, while the Shenzhen Composite Index rose 3.8 percent.

The Hang Seng Index in Hong Kong rose 0.8 percent. In Japan, the Nikkei 225 index fell 0.3 percent after disappointing wage data there. South Korea’s Kospi index rose 0.3 percent.

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2019-05-10 13:00:37Z
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Elon Musk is wrong on robotaxi timing, Uber CEO Dara Khosrowshahi says - CNBC

Uber CEO Dara Khosrowshahi told CNBC he agrees with Tesla CEO Elon Musk that the future of mobility is electric, but he disagrees with Musk that truly autonomous "robotaxis" will next year.

In an interview that aired on Uber's IPO day on Friday, "Squawk Box" co-host Andrew Ross Sorkin asked him what the future of mobility looks like.

"First of all, it's got to be electric," the CEO said. "We think that's a no-brainer. It's good for the environment. It's where the world is going. And we're playing our part, for example, in London to move it electric." He added that Uber, of course, thinks the future of mobility also has to be "shared."

The ride-hailing giant will make its debut on the New York Stock Exchange on Friday, pricing its IPO on Thursday night at $45 per share.

Tesla CEO Elon Musk recently told investors he is ready to take Tesla into a new, driverless era. The company should have a million vehicles capable of functioning as driverless robotaxis on the road by the end of 2020, he said. He also told investors that self-driving technology and services will help his electric car company grow to a $500 billion market cap.

When the Uber CEO first heard Musk's predictions about this, Khosrowshahi said, "I thought: If he can do it, more power to him. Our approach is a more conservative approach as far as sensor technology and mapping technology. The software's going to get there. So I don't think that his vision is by any means wrong. I just think we disagree on timing."

Musk has also promised investors and fans that Tesla's self-driving cars will be able to work 100 hours a week, generating tens of thousands of dollars in income for their owners. He has also said that Tesla should be able to win regulators over to approve Tesla robotaxis for commercial use in the near future, at least in some locales.

Tesla and Uber have seen their semi-autonomous vehicles involved in fatal crashes in recent years.

Khosrowshahi struck a more sober tone about a driverless future.

"I think it will be quite a few years beyond," he said.

While media coverage and industry conversations have focused on the dramatic notion that robots will steal jobs from people, the Uber CEO said he believes automation will always work better to augment humans' work. The better things are robots and humans together. Hybrid is always better, and hybrid states can continue for a much longer period than you think."

In addition to its sizable ride-hailing business, Uber offers bike and scooter rentals, food delivery and operates a freight marketplace that links senders to shippers. Uber is developing self-driving vehicle technology through its Advanced Technologies Group.

Post-IPO Uber has a market capitalization over $80 billion. Tesla's market cap currently stands around $43 billion.

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2019-05-10 12:23:18Z
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