Remember Lyft (LYFT)? It’s the second major player in the ride-hailing industry behind long-time rival Uber, but the first among the two to have its stock price destroyed post an overhyped IPO.
Lyft’s stock tanked about 7% to $47.54 on Monday, swept into the frantic selling that has enveloped Uber (UBER) in the hours after its widely followed IPO on Friday. Not helping sentiment for Lyft is the awful momentum in the stock post its own late March IPO and U.S.-China trade war fears roiling global markets.
“The shorts are in control on Lyft,” Wedbush analyst Dan Ives told Yahoo Finance.
To say the very least.
At $47.84, Lyft’s stock remains well below its first trade on its IPO day of $88.60. The stock is also trading shy of the $72 a share it was priced at on the roadshow.
Ives said Lyft’s stock could easily lose another 5% to 10% in short order as investors fret about the lack of profits (for Uber, too) and general broader market weakness. But then the selling may subside a bit.
“If the stock falls another 10%, you can see investors sharpen their pencils on valuation and see a rally,” Ives explained.
Lyft did very little on its first earnings call earlier this month to stem the tide in the stock. Despite management touting 2019 as the peak year of losses, Lyft lost $211.5 million on an adjusted basis in the first quarter. The company guided to 2019 adjusted losses of a shocking $1.15 billion to $1.175 billion.
Ives also pointed out investors were upset by Lyft’s lack of disclosures on bookings.
As long as Uber’s stock remains under pressure, the same could be the case for Lyft. And right now, Uber shares crashed more than 10% Monday.