Shares of Uber (NYSE: UBER) closed the week about 9% higher to stay above the important support in the short term. The ride-hailing firm is reportedly looking to acquire its rival Free Now for over €1 billion ($1.2 billion).
Fundamental analysis: New targets identified
Free Now is a ride-hailing taxi company, jointly owned by Daimler and BMW. Daimler is ready to strike an agreement with Uber while Oliver Zipse, the CEO of BMW, remained hesitant and is thinking about offering Uber a stake in the company, according to reports.
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If the deal happens, it would significantly reinforce Uber’s position in the ride-hailing industry in Europe.
Free Now started operating last year, when it was jointly formed by German automotive giants, Daimler and BMW. The taxi app operates in over 100 cities across Europe and users are able to rent both standard taxis and private cars, like those of Uber’s.
Users who used Free Now were previously riding in black cabs such as those in London, until the company merged with the French ride-hailing firm Kapten a few months ago.
Before the merger, Kapten was the second-biggest ride-hailing company in Britain, and the merging made it a direct rival to Uber, which has been closely investigated by regulators.
Uber won approval to continue running its business in London for another 18 months after London transport regulator said it won’t renew Uber’s operating license last year, due to issues associated with Uber’s safety practices. It’s important to point out that London is Uber’s largest market in Europe.
“Uber does not have a perfect record but it has been an improving picture,” deputy senior district judge Tanweer Ikram said in a written verdict last month.
“Despite their historical failings, I find them, now, to be a fit and proper person to hold a London private hire vehicle (PHV) operator’s license,” he said.
Technical analysis: Solid gains made
Uber stock price closed the week at $36.75, or 8.99% higher on the week. This way, the buyers have managed to protect the important support zone near 35.00. This is where two diagonal trend lines meet to create a critical short-term support.
The bulls are now well-positioned to push for a move above the near-term resistance line above the $38 handle. A break above $38.78 would mark a new 8-month high for Uber stock. In this case, a new wave of buyers of Uber shares are likely to emerge wanting to push the stock towards $41.86.
Uber has reportedly offered over €1 billion ($1.2 billion) to acquire the European ride-hailing company, Free Now. In the meantime, Uber stock price made important gains to help position the stock to make further gains.