Lyft shares were down sharply this morning, falling nearly 20% in early trading. The company’s capital is being sold on the back of the US ride-sharing giant’s first-quarter results and its comments on the current quarter, and how its new strategic stance will affect its growth and economy in coming quarters.
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Following Lyft’s decision to remove their founders from day-to-day control, slashed staff and hired an outside CEO, the company is now a leaner organization under new management. However, while Lyft saw its valuation drop after reporting its results and updating his strategic stance, Uber’s shares rose sharply on the back of its own earnings update.
It could be argued that Lyft waited too long to turn around its operations, given the stark comparison to Uber after both companies’ first-quarter earnings reports. But Lyft is taking a new tack now, which we need to understand.
While Uber and Lyft are among the best-known on-demand companies in the US market, countless startups have tried to use similar models to build their own businesses over the past half-decade. So, as Uber and Lyft are doing, perhaps so are the surviving startups that tried to imitate their meteoric rise.
This Friday morning we’re looking at Lyft’s first quarter results and second quarter guidance, the latter of which we’ll place in the context of its strategic options moving forward. Notably, a lot of what Lyft is doing fits right in with other corporate options we’ve seen recently. Many other tech and tech-enabled companies are looking to downsize, remove layers of management, and refine their product focus. From that perspective, Lyft is part of a larger trend. Let’s see how those options fit into your future product and pricing options.
Tepid investor reaction clouds Lyft’s new strategy by ana heim originally posted on TechCrunch
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