Shares of the ride-hailing company Uber Technologies (UBER 1.32%) were sliding today despite an analyst maintaining his buy rating on the stock and raising his price target for Uber's shares.
The drop comes a day after a California appeals court ruled that Uber drivers can be classified as independent contractors and not employees. Investors jumped on the stock yesterday on that news, but they may be pulling back today as they weigh the broader sentiment in the stock market.
The stock fell by as much as 3% this morning and was down 2.2% at 11:29 a.m. ET.
Yesterday, Uber investors were happy to hear that the company's drivers can be designated as independent contractors. Then, today, Deutsche Bank reiterated its buy rating for Uber stock and raised its price target for the company's shares from $42 to $44.
You'd be right to assume that with these two bits of good news Uber's stock would be edging higher again today, but investors are likely pushing Uber's shares down as the broader market slides on worries about the banking industry.
After the collapse of both SVB Financial and Signature Bank over the past week, investors grew concerned about Swiss bank Credit Suisse after it said that it found "certain material weaknesses in our internal control over financial reporting" for 2020 and 2021. Additionally, Saudi National Bank, which is Credit Suisse's largest investor, said today that it won't provide the bank with any additional funding.
If you're wondering why a Swiss bank's troubles are affecting a U.S. ride-sharing company, the answer lies in how jittery some investors are right now over the stability of the banking system. The Credit Suisse news sent the S&P 500 down 1.5% and the tech-heavy Nasdaq Composite down 1.1% today.
Banking industry woes aside, Uber investors will want to continue to keep a close eye on the company's legal issues. The recent California appeals court ruling will likely be challenged in the California Supreme Court.
And with the current pessimism in the broader market, investors may want to brace for more share price instability in the short term.