Uber Technologies Inc’s shares made a disappointing market debut on Friday, marking a rocky start for the most anticipated initial public offering of the year as other high-profile startups such as Slack and WeWork look to go public.

The fall in shares undermined Uber’s strategy of pricing its oversubscribed IPO conservatively at $45 a share to avoid a repeat of rival Lyft Inc’s stock market struggles following a strong debut in March.

The company’s shares opened at $42 and fell as much as nine percent to a low of $41.06 in early trading before recovering most of their losses to trade down 2.5 percent at $43.92 by 18:05 GMT. Lyft was down four percent, well below its IPO price.

Uber’s IPO comes against the backdrop of an increase in trade tensions between the United States and China that has weighed on financial markets and increased investor scepticism about its ability to turn profitable soon enough.

Chief Executive Dara Khosrowshahi, who was on the NYSE trading floor to mark the debut, tried to calm investors by pointing to the company’s growth prospects and expansion plans.

“My reaction [to the share price] is if we build and build well, shareholders will be rewarded. We’re certainly not measuring our success over a day, it really is over the years,” Khosrowshahi said.

Landmark moment

The IPO was a landmark moment for the decade-old company, which was started after its founders struggled to find a cab on a snowy night and has grown into the world’s largest ride-hailing company, making more than 10 billion trips.

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Khosrowshahi was accompanied by a team of Uber officials at the NYSE to celebrate the start of the company’s life as a listed entity. Cofounder and former CEO Travis Kalanick, who resigned in 2017 under pressure from investors, was also seen on the trading floor.

The company’s road to IPO was marred by several hurdles including increased regulations in several countries and fights with its drivers over wages. On Wednesday, Uber drivers in several major cities worldwide turned off their apps for several hours to demand better working conditions and rates.

Uber has said that it has the potential to grow not just in the cab-hailing business, but also as a “superapp” to provide a variety of logistics services, such as grocery and food delivery, organising freight transportation, and even financial services, much like Grab, its Southeast Asian counterpart.

But market experts have struggled to find value in a company that has consistently posted losses and warned that it may never actually be profitable.

“The business is unprofitable, new entrants can enter the market, there is potential regulatory risk, and it is very price sensitive. What is there to like about this opportunity?” Robert Johnson, professor of finance at Heider College of Business, Creighton University in Omaha, Nebraska said.

Uber’s debut and its coming days of trading will be closely watched by other prominent startups looking to tap into public money, including flexible office space firm WeWork and workplace messaging app-owner Slack Technologies Inc. Both companies have confidentially filed for IPOs.

As a private company, Uber has raised more than $15bn from investors to drive its growth and expansion into food delivery and freight hauling, with little regard for turning a profit. Uber reported a loss of $3.03bn in 2018 from operations.

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“We are willing to give quite a bit of rope and leeway on current profitability if you can show how you’re going to get there,” said Jordan Stuart, a portfolio manager at Federated Kaufmann who often purchases companies’ shares during an IPO.

As a public company, Uber will have to deal with quarterly earnings reports and demands from shareholders to plot a path to profitability.

The company weathered controversies including the unearthing of a culture of sexism and bullying at Uber and a US Department of Justice investigation, which culminated in the resignation of Kalanick. Uber eventually hired Khosrowshahi to lead the company.