Hatch Weekly: Investors ride the lows of rideshare shares

Rideshare, don’t care

Shares of both Uber (UBER) and Lyft (LYFT) are trading more than 30% below their initial public offering prices since they debuted on Wall Street earlier this year, dropping 6% and 7% respectively last week.

Big losses peak?

Uber and Lyft have revolutionised the way we commute, but it hasn't come without cost. With no sign of turning a profit for several years, they appear to be comfortable with grabbing market share at any price. In addition to lacklustre share prices, losses continue for both companies. Uber has posted a loss of $5.2 billion in the second quarter, with Lyft posting a loss of nearly $650 million. Both CEOs have indicated that sizable losses have peaked, and revenue and rides booked are moving in the right direction. Lyft posted big revenue growth in Q2 as their sales were up more than 70% from the same quarter in 2018. Uber reported that Q2 revenue increased by 12% over the same quarter the previous year and that trips rose 35%, with monthly active riders up 30%.

Mirror, mirror, on the wall, who’s the most profitable of them all

Private investors have poured in as much money as required in the race to the top for many disruptive tech companies. But, it seems that profitability still seems to matter to retail investors. Zoom Technologies (ZM) was profitable before its IPO, and once its shares hit the market, retail investors have shown their love. Will these companies ever live up to the hype that surrounded their IPOs? Keep in mind that shares in Facebook (FB) also sank after its IPO in 2012. Amazon (AMZN) lost money for 14 years before finally becoming profitable. Many retail investors are content to look at the future potential and are looking for long-term value, so they are willing to ride out shorter-term highs and lows. It's a good reminder that investing in IPOs comes with different risks than investing in established publicly-traded companies, so investor beware

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JLo can teach you how to invest

When it comes to investing, studies show that men are far more willing to take financial risks. Men are less risk-averse than women, so they’re able to put aside thoughts of possible failure or even big losses to go after investment opportunities they think are promising. Women are more inclined to play it safe – but not Jennifer Lopez.

A Grammy-nominated investment sensation

Sure, she's known for her incredible on-stage performances, but her financial prowess could be equally celebrated. In the first half of 2018 alone, Lopez banked $47 million and has an estimated net worth of $400 million. Ambitious as all heck, Lopez has been steadily growing her investment portfolio for some time now. In 2017, she contributed to the $15 million Series B funding for NRG Esports (a competitive gaming team), an industry that’s estimated to cross the billion-dollar mark by the end of 2019. She’s also invested in fitness facilities like Sarva, a yoga startup with 34 studios in India, and the investment platform Acorns.

We can all learn from Jenny from the Block

For women keen to experience the world of investing, JLo can teach us a lot. She’s built a relatively diversified portfolio from real estate to fintech, she aligns some of her investments with her values (she’s passionate about yoga), and she’s looking to take advantage of the potential of a number of growth industries. If you’re curious about industries that are set to grow, according to World Finance, the five fastest-growing sectors are:

  1. Renewable Energy 

  2. Cyber Security 

  3. Biotechnology 

  4. Virtual Reality

  5. Artificial Intelligence

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