atans1

HoHoHo: Bad news for Go-Jek and Grab

In Indonesia, Malaysia, Temasek, Vietnam on 11/05/2019 at 5:32 am

Uber’s shares sank almost 8 per cent below their offer price on Friday, giving the ride-hailing company a disappointing market value of below $70bn — a far cry from the $100bn valuation it had until recently hoped to achieve.

FT today

Meanwhile Lyft which was valued at U$22.4bn at its IPO closing price (up 9% from its offer price). By May 7th, the day it reported results for the first quarter as a public company, it was worth only US$17bn. Lyft’s share price fell by another 11% the next day.

These performances have

left investors questioning the appetite for unprofitable car-booking companies that have relied on a flood of private capital to fund heated expansion and competition.

FT

As Economist says

Both firms have enough cash to continue to burn money for years, but public investors expect a rapid path to profitability. Making it into the black will require either raising prices or reducing the cut of bookings passed on to drivers. The former will be hard; in many markets ride-hailing competes with other cheap modes of transport, such as buses, bicycles and riders’ own cars.

Think Grab and Go-Jek, and Temasek that has invested in them. Grab and Go-Jek are also losing money.

Btw, in 2018 according to an article in the Tiền Phong newspaper, GIC realised a 60% loss over 4 years after it sold 5.4 million shares in Vietnamese taxi operator Vinasun.

 

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