The Federal Trade Commission (FTC) has begun an investigation into Uber (UBER), according to a report from Bloomberg. The outlet reports that the government agency, which works to ensure consumer protection and enforce antitrust law, has reason to believe that Uber may be engaging in illicit business practices. Customers have complained that Uber has signed them up for its flagship subscription service, Uber One, without their expressed consent and made it hard for them to simply cancel the service.
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What’s Happening with Uber Stock
After a day of mostly trending upward, Uber stock has slipped into the red in after-hours trading, which may be due to the investigation news. Shares have struggled lately and are down slightly for both the week and the past three months. However, UBER stock is still in the green for the past two quarters despite difficult market conditions. Depending on how the investigation goes, it could potentially compromise share prices in the coming weeks.
That said, it is unlikely that the investigation will be drawn out unless the FTC finds clear evidence of illicit activity. Donald Trump is about to be sworn in as President, and as Bloomberg reports, “enforcement agencies in the waning days of an administration often seek to wrap up probes [].” This means that the FTC will likely have to conclude the review in the fairly near future.
So far, Uber is complying with the FTC’s requirements as the agency carries out the review. It denies any knowledge of illegal activity and claims that Uber One subscribers can easily cancel their services at any time. So far, the FTC has issued no statement on the investigation. Ultimately, the impact that it will have on UBER stock, if any, depends on the information that is released in the near future.
Is Uber Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on UBER stock based on 34 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 27% rally in its share price over the past year, the average UBER price target of $93.26 per share implies 30.5% upside potential.
