LYFT: Peak Loss (or Revenue?)
Here’s a reader’s take on the U.S.-China trade war:
“I worry that a trade war might lead to a shooting war.
“Each side seems to think that the other will back down, but US Navy ships keep sailing through what China considers their territorial waters, and it would only take one miscalculation on either side to cause an incident that neither would be willing to back down from.
“I think ‘face’ is as important to Trump as it is to the Chinese, and things could go from bad to catastrophic in a heartbeat.
“The trade war just means that annoyance, resentment and edginess are already present on both sides, perhaps with a good dose of a ‘don’t push me too far’ attitude.
“Neither side really thinks this will lead to war at this point, but I fear that we are walking on a knife edge.”
Do you have similar concerns? Do you think Trump will stand down in order to avoid all out war?
Your Rundown for Thursday, May 9, 2019:
Peak Loss Lyft
Speaking of walking on a knife edge, Lyft announced its first-ever quarterly earnings as a publicly traded company.
While revenue nearly doubled from the same quarter last year — up to $776 million from $397.2 million — Lyft reported losses of $1.14 billion in the first quarter or a stunning $48.53 a share.
Lyft shares haven’t traded higher than its original IPO price of $72 since Apr. 5… and even that was short-lived. On news of rising revenue but whopping losses, shares initially dropped 2% but regained more than 2% after Lyft CEO Brian Roberts’ conference call.
“We are encouraged by our strength of our core business and see a clear path of profitability and ridesharing,” he said.
“We anticipate that 2019 will be our peak loss year as we then move steadily towards profitability on a consolidated basis.”
For shareholders, let’s hope that it’s not the other way around — peak revenues — especially as the other ride-sharing company makes its IPO tomorrow.
Last, we leave you with this comment from a reader: “If you believe that Lyft (or Uber, for that matter) will ever become profitable (by basically selling $1 bills for 50 cents each), then I’ve got some vintage 2007 Mortgage Backed Securities that are going be worth money any day now….”
Market Rundown for Thurs. May 9, 2019
S&P 500 futures are down 37 points to 2,842.65.
Oil is down 77 cents to $61.35.
Gold’s up $5.50 to $1,286.90.
Bitcoin a $42 above the $6,000 mark now.
Have a good day. We’ll talk tomorrow.
For the Rundown,