Ride-hailing investors saw their holdings fall Tuesday to the lowest level ever, led by Lyft Inc (NASDAQ: LYFT), whose stock dropped more than 7%, while Uber Technologies Inc (NYSE: UBER)'s stock fell close to 6%.
Both stocks have lost nearly one-third of their value since their respective initial public offerings.
The two companies remain unprofitable, and Uber even cautioned investors months ago it may never make money.
On Tuesday, the two companies were dealt another blow after the state of California came one step closer to mandating that ride-hailing companies reclassify drivers as employees instead of freelancers.
Why It's Important
Uber CEO Dara Khosrowshahi told investors its second-quarter $5.24-billion net loss is a "once in a lifetime" event, while Lyft CFO Brian Roberts argued its losses peaked last year, CNBC said.
Some Street analysts are echoing similar encouraging stances, including JMP Securities analyst Ronald Josey, who argued that the price war environment has eased and "pricing could continue to be rational."
Retail investors aren't the only ones feeling the pain. SoftBank, an early Uber investor, has lost $600 million since its 2018 investment, CNBC reported.
As part SoftBank's investment, the Japanese conglomerate was given the option to gain two board seats, but the U.S. Committee on Foreign Investment didn't approve the agreement.
SoftBank CEO Masayoshi Son had big plans to create a global portfolio of next-generation transportation companies, and it is unclear what he will do next.
Uber shares were trading higher by 2.25% at the time of publication Wednesday, while Lyft shares were up 0.4%.
Traffic Jam: Uber Seen Posting Losses In Latest Quarter As Stock Still Stuck
Lyft's Quarter Shows Ride-Sharing Market Strength, May Be Good Sign For Uber
Photo courtesy of Uber.
Latest Ratings for LYFT
View More Analyst Ratings for LYFT
View the Latest Analyst Ratings
See more from Benzinga
- Report: Uber Struggling To Secure New 5-Year License In London
- Domino's CEO Attributes Poor Growth To Delivery Apps As McDonald's Expands Third-Party Partners
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.