Uber, DoorDash, Lyft lose a combined $9 billion in market cap amid sell-off

The country’s three largest app-based concert companies extended their losing streaks and shed a combined market capitalization of $9.12 billion on Monday after a broad market sell-off.

DoorDash Inc. DASH,
the stock closed at an all-time low after sinking 11% to $64.18, its biggest percentage decline since March 14, when it fell 12.54%. It was also the worst three-day stretch for shares since the three days ending March 7, when they fell 22.93%. The company lost $2.76 billion in market capitalization on Monday.

Shares of ride-sharing giants Uber Technologies Inc. UBER,
and Lyft Inc. LYFT,
both closed at lows they had not seen since their worst performance at the start of the coronavirus pandemic two years ago. Uber shares closed at $23.05, down 11.6%, its lowest close since April 3, 2020, when it closed at $22.82. Lyft shares closed down 9.3% at $18.61, their lowest close since March 18, 2020, when they closed at $16.05. Uber saw its market cap lose $5.7 billion and Lyft lost $660 million on Monday.

For Uber, the big decline came on the same day as a news report that Chief Executive Dara Khosrowshahi sent an email Sunday night to staff announcing cost cuts, treating hiring “as a privilege” and having than “doing more with less”. In the email, the CEO cited “a seismic shift” in the market and investor expectations. So he said the company would make a change of its own: Instead of measuring profitability progress using adjusted Ebitda, it will use free cash flow.

Analyst Tom White at DA Davidson said on Monday he was pleased to see Khosrowshahi “moving decisively in response to the changing backdrop of the stock market and major investor issues.”

On the other hand, Lyft executives told analysts during last week’s earnings call that they intended to spend more on driver incentives and marketing, sending the company’s shares tumbling. White attributed the contrast in tactics to Lyft’s “lack of a multi-product platform during the pandemic,” which negatively affected its supply of drivers. Meanwhile, Uber has said its delivery business has allowed it to keep drivers who might have been left behind by the pandemic on its platform.

Uber, Lyft and DoorDash reported first-quarter results last week, beating revenue expectations but continuing to post net losses. Uber shares are down 45% year-to-date, while Lyft and DoorDash shares are down more than 56% and 57%, respectively, year-to-date.

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