Briefing

Lyft’s stock jumps after announcing plans to reach profitability by 2021

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The projection is based on adjusted earnings, before accounting for interest, taxes, depreciation and amortization. If successful, the company will be profitable a year sooner than what analysts expected. Lyft’s stock was up 5.16 per cent on the news in late afternoon trading, and rival Uber was up 3.50 per cent. (Wall Street Journal)

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Talking point: Public markets have been ramping up pressure on recent unicorns to deliver profits. Lyft is among a host of new public companies, including Uber and Slack, that have seen their massive valuations drop after going public. Investors have criticized their slow paths to profitability as the companies, used to generous venture capital funding, continue to burn cash and accumulate losses. “We need to build trust with a new class of investors and with two quarters beating expectations, we’re excited for the next few quarters,” said John Zimmer, the company’s co-founder and president. While Uber’s stock price also rose on Lyft’s news, the ride-hailing leader hasn’t yet said when it expects to turn a profit.