What if we say that Lyft was once the second major company in the ride-hailing industry? Their long-time rival Uber was at the top and now, both companies struggle to keep their stock in the place where it should be.
The overhyped IPO left both Lyft and Uber scratching their heads and without profit. Lyft IPO stock decreased by about 7% to $47.54 and as such, it’s in the same ballpark as Uber.
The Future Isn’t Very Bright
Lyft got another punch in the nuts with the US-China trade war that’s not going to end soon. With the price of $47.84, the company’s stock remains far below the first trade on the IPO day, which was then $88.60. Dan Ives points out that Lyft could lose another 5% to 10%, as investors began to stay away from Lyft and Uber. This can cause both companies to lose profit and become non-profitable in the next couple of years.
If the profit falls another 10%, the investors’ decisions will be clearer than ever and the company would need serious thinking and evaluations to get back on top. At the beginning of May 2019, Lyft did almost nothing to stem the tide in the stock. This lead to huge financial losses, lasting from the beginning of 2019.
The management touting in 2019 didn’t help Lyft either. They lost a total of $211.5 million just in the first quarter of 2019, which is astonishing. The adjusted losses are approximated to about $1.15 billion and can even go beyond $1.175 billion.
Lyft vs Uber
Is Uber at a better position than Lyft? It’s hard to say since both of these giants are slowly sinking. Meanwhile, some say that because of the company’s value, Uber will not fall so low in the next couple of years. Still, losing the billions worth of profit for these companies could mean years of effort to get back into place.