Lyft shares continue to fall below their opening day price, and on Wednesday (May 8) they dropped almost 11 percent to a new record low after the company posted a big Q1 loss, according to a report by Reuters.
The news puts even more pressure on Uber as it prepares for its own IPO pricing on Thursday, when investors on Wall Street will decide whether they’re going to invest in the ride-hailing giant.
Lyft shed $1.1 billion for the March quarter, although some analysts highlighted the company’s revenue growth. Lyft shares are down 27 percent from their initial price on March 28, which gives the company a valuation of around $15 billion.
Uber said it was going to price its IPO within the range of $44 to $50 a share, to avoid Lyft’s poor performance on the market. The company priced its shares aggressively at the top of its range.
Uber is aiming for a valuation between $80.5 and $91.5 billion, which is a third below the value of what the ride-hailing company was reportedly hoping for. In order to succeed, Uber will need to differentiate itself from Lyft by highlighting its other departments, like Uber Eats, which is successful. Neither company has turned a profit, nor have they released timelines for when they may do so.
Some analysts think that when autonomous cars become more common, it will happen.
Lyft’s loss of 448.53 a share was mostly due to stock-based compensation and payroll tax tied to its IPO. The company’s revenue rose 95 percent to $776 million, which is more than analysts expected.
Lyft didn’t disclose its quarterly bookings, which would include how much of each fare goes to a driver and how much goes to Lyft. Many analysts from brokerages like JPMorgan and Credit Suisse wrote upbeat reports about Lyft.
“We believe Lyft will be both a catalyst and beneficiary of the growth of ridesharing and autonomous tech over the next 10 (plus) years,” Piper Jaffray analyst Michael Olson wrote in a client note.
He kept his “overweight” rating and his $78 price target.