Uber and Lyft plunge, erasing recent gains after promising profits – TechCrunch

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

A few weeks ago, Uber and Lyft, kicking bags of the 2019 stock market and regularly cited as examples of venture-backed excess, were back to fighting form.

After encouraging Q3 2019 reports from both ride-hailing giants that included fresh profitability promises and timelines, Uber upped the ante by moving its profitability goal up when it reported Q4 results earlier this year. Shares of the famous company rallied. When Lyft failed to mimic the declaration in its own Q4 earnings report, it was dinged by investors. But from the time of their Q3 2019 earnings reports to recently, Uber and Lyft were coming back up for air.

Suddenly, it was perfectly reasonable to be optimistic about the two ride-hailing companies that had become more famous for their sticky losses than their growth potential; as the pair had matured from upstart to public company, their money-losing methods appeared increasingly permanent, making the Q3 2019 and Q4 2019 profit declarations investor balm.

But after the rally came the novel coronavirus and COVID-19. Since then, the two companies have lost huge amounts of ground. Their shares fell 9.8% (Uber) and 11.8% (Lyft) yesterday alone. In pre-market trading this morning, they are down even more. I wanted to get my head around what could be causing this, so let’s run through each company’s most recent profit forecasts, results, share price gains and losses, and what investors are telling the world through their recent selloff. (Hint: DoorDash’s IPO probably isn’t happening soon.)