SAN FRANCISCO — Lyft’s debut on the stock market is off to a bumpy start.
The ride-hailing company went public in a blaze of glory on Friday, as its stock jumped 8.7 percent from its initial public offering price of $72 a share. But on Monday, its second day of trading, Lyft’s stock plunged more than 10 percent to below $72. It was trading at $68.94 as of 3:16 p.m. Eastern time.
The rapid decline raises questions about investors’ appetite for fast-growing but unprofitable tech companies. While Lyft has been expanding and gaining new revenue, it lost nearly $1 billion last year. Ride-hailing companies often subsidize the cost of rides and pay incentives to drivers, which is expensive. And Lyft is also spending heavily on initiatives including electric bikes and self-driving technology.
Other tech companies that went public while recording heavy losses, such as Snap, Twitter and Groupon, also eventually fell below their offering prices.
“Everyone is taken up with the idea of the ride-hailing business; it’s exciting and high-growth,” said Kathleen Smith, a principal at Renaissance Capital, which manages an I.P.O.-focused exchange-traded fund that will include Lyft later this week. “But it’s hard to figure out their valuation.”
Lyft declined to comment.
Lyft’s performance could sway other high-profile tech companies that are planning to go public.
Uber, the world’s biggest ride-hailing company, is planning to go public in the next few months; it is also deeply unprofitable. Others are also stampeding toward the public market, including: Pinterest, the digital pin board; Slack, the messaging company; and Peloton, the home-fitness company.
“The ones following in the wake of Lyft will be priced more reasonably,” Ms. Smith said.
Even if Lyft eventually makes money, its margins might be low, she cautioned. Lyft is constantly dealing with new competitors, which means that it may have to continue subsidizing its drivers and cutting the prices that it charges passengers. That makes profits a faraway prospect.
Computers back up at OIA amid nationwide flight delays
NEW YORK - Passengers on six major airlines experienced delays Monday morning due to systemwide computer outages.
Delta Air Lines, Southwest Airlines, United Airlines, JetBlue Airways and Alaska Airlines were affected, according to the Federal Aviation Administration. American Airlines also reported technical issues.
Here are the latest updates:
At the Orlando International Airport, there were several cancellations and delays. However, at about 7:20 a.m., airport officials said the computers were up and running and passengers began boarding their flights.
“I’m kind of surprised so many planes are delayed. I travel every week for work, so, this is pretty significant,” passenger Steven Taylor said.
“There's currently a technology issue that's impacting our operation this morning,” the company said in a Tweet.
We have received word that the problem has now been resolved. While we always aim for smoother sailing, we appreciate you hanging in there with us. -Nidhi
Update 8:25 a.m. EDT April 1: Officials confirmed to The Atlanta Journal-Constitution that a technical issue that caused flight delays for multiple airlines was resolved Monday morning.
“A brief third-party technology issue prevented some Delta Connection flights from being dispatched on time this morning has been resolved,” Delta said in a statement to AJC.com. “No cancellations are expected due to the issue and our teams are working to resolve some resulting delays. We apologize to customers for any inconvenience.”
Update 8:10 a.m. EDT April 1: Delta and American airlines are telling some passengers on social media that the problem has been resolved.
A brief technology issue prevented some Delta Connection flights from being dispatched on time this morning has been resolved. No cancellations are expected due to the issue and our teams are working to resolve some resulting delays.(cont.) HJZ
Update 7:31 EDT April 1:American Airlines tweeted that a system called AeroData “is currently experiencing a technical issue that is impacting multiple carriers, including a few of our regional carriers.”
According to WHNT, AeroData is “used to calculate the weight and balance of flights.”
United, Alaska and JetBlue airlines also are experiencing delays, the station reported.
AeroData is currently experiencing a technical issue that is impacting multiple carriers, including a few of our regional carriers.
Original report: Southwest and Delta airlines tweeted early Monday that flights across the country are experiencing delays due to technical difficulties.
About 6:30 a.m., both airlines were responding to tweets from angry customers who said their flights had been temporarily grounded by a systemwide computer outage.
It's affecting our flights system wide, and we're working to see if it's affecting any other carriers this morning as well. In the meantime, once more information has been made available our Agents at the airport will be happy to disseminate it to y'all. -Rocky
I completely apologize, we are currently experiencing a System-Wide Outage we are working diligently to get it back up and running. We do not have a specific time as yet. TMC
Although it wasn’t immediately clear what system was experiencing a technical glitch, civil rights activist DeRay Mckesson tweeted that a Delta pilot told him that “the system that gives them clearance paperwork” was down.
I’m on the runway on a Delta flight and the pilot said the system that gives them clearance paperwork is down and that they’ll hopefully get a system update in 10 minutes.
At 7:15 a.m. EDT, Southwest tweeted to a passenger in Chicago that the problem had been resolved.
Hi there. Apologies for the inconvenience this morning as we fought through some technology issues. We've received word that the problem has been resolved, though, so we'll have you on your way ASAP. Please speak to our Crew onboard for info. -Austin
WASHINGTON (Reuters) - U.S. retail sales unexpectedly fell in February, the latest sign economic growth has shifted into low gear as stimulus from $1.5 trillion in tax cuts and increased government spending fades.
FILE PHOTO: People shop at Macy's Department store in New York City, U.S., March 11, 2019. REUTERS/Brendan McDermid/File Photo
There was, however, some encouraging news on the economy. Other reports on Monday showed a pickup in manufacturing activity in March and the third straight monthly increase in construction spending in February. Still, the risks to economic growth in the first quarter remain tilted to the downside.
The loss of momentum also reflects higher interest rates, slowing global growth, Washington’s trade war with China and uncertainty over Britain’s departure from the European Union.
These factors contributed to the Federal Reserve’s decision last month to abruptly end its three-year campaign to tighten monetary policy. The U.S. central bank abandoned projections for any interest rate hikes this year after increasing borrowing costs four times in 2018.
“The consumer is lost in the woods and this makes for a gloomy economic outlook this year if they cannot find their way,” said Chris Rupkey, chief economist at MUFG in New York. “The Fed was wise to move to the sidelines.”
Retail sales dropped 0.2 percent as households cut back on purchases of furniture, clothing, food and electronics and appliances, as well as building materials and gardening equipment. Data for January was revised higher to show retail sales increasing 0.7 percent instead of gaining 0.2 percent as previously reported.
Economists polled by Reuters had forecast retail sales rising 0.3 percent in February. Retail sales in February advanced 2.2 percent from a year ago.
The surprise drop in sales in February could partly reflect delays in processing tax refunds in the middle of the month. Tax refunds have also been smaller on average compared to prior years following the revamping of the tax code in January 2018. Cold and wet weather could also have hurt sales.
The February retail sales report was delayed by a 35-day partial shutdown of the federal government that ended on Jan. 25. March’s retail sales report, which was scheduled for publication on April 16, will be released on April 18.
The dollar was trading lower against a basket of currencies, while Treasury prices were down. U.S. stocks rose.
Excluding automobiles, gasoline, building materials and food services, retail sales fell 0.2 percent in February after an upwardly revised 1.7 percent surge in January. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
DEMAND WEAKENING
They were previously reported to have rebounded 1.1 percent in January. Consumer spending accounts for more than two-thirds of economic activity. The sharp upward revision to core retail sales in January was insufficient to reverse December’s more than 2.0 percent plunge, leaving expectations for tepid GDP growth in the first quarter intact.
Growth estimates for the January-March quarter are as low as a 0.8 percent annualized rate. The economy grew at a 2.2 percent rate in the fourth quarter after expanding at a 3.4 percent clip in the July-September period.
But green shoots are emerging in some sectors of the economy. In a separate report on Monday, the Institute for Supply Management said its index of national factory activity rose to a reading of 55.3 in March from 54.2 in February, which had marked the lowest level since November 2016.
The reading was slightly above expectations of 54.5 from a Reuters poll of 69 economists. A reading above 50 indicates expansion in the manufacturing sector and a reading below 50 indicates contraction.
Another report from the Commerce Department showed construction spending rose 1.0 percent to a nine-month high in February after surging 2.5 percent in January.
The February retail sales report showed receipts at building materials and garden equipment and supplies dealers tumbled 4.4 percent, the biggest drop since April 2012. Receipts at clothing stores fell 0.4 percent and those at furniture outlets dropped 0.5 percent.
Sales at food and beverage stores declined 1.2 percent, the biggest drop since February 2009. Receipts at electronics and appliances stores fell 1.3 percent, the largest decline since May 2017.
But consumers bought more motor vehicles, with sales at auto dealerships rebounding 0.7 percent after declining 1.9 percent in January. Households also spent more at service stations, likely reflecting higher gasoline prices.
FILE PHOTO: People are seen with shopping bags in Times Square in New York City, U.S., November 23, 2018. REUTERS/Brendan McDermid/File Photo
Online and mail-order retail sales rose 0.9 percent. Sales at restaurants and bars edged up 0.1 percent and spending at hobby, musical instrument and book stores increased 0.5 percent.
Slowing demand was highlighted by a fourth report from the Commerce Department showing business inventories rose 0.8 percent in January.
Reporting by Lucia Mutikani; Editing by Andrea Ricci
(Reuters) - Major U.S. airlines were back up and running on Monday after a system-wide outage delayed hundreds of flights and fired-up customer complaints on social media, the second such disruption in a week.
The Federal Aviation Administration said the root of the problem was caused by the program provided by Scottsdale, Arizona-based AeroData Inc that helps airlines measure and manage weight and balance.
The agency released a statement around 8.30 a.m. ET, saying the issue had been resolved and an FAA spokesman said it plans to look into the outage.
American Airlines, Southwest Airlines and Delta Air Lines had reported outages. United Airlines said it was unable to create paperwork for some time.
"A brief third-party technology issue that prevented some Delta Connection flights from being dispatched on time this morning has been resolved," Delta said.
Other airlines also reported a series of delays.
Southwest Airlines was the first carrier to report that the problem had been resolved and it would get travelers moving soon, but added that customers could expect flight delays.
A Southwest spokesman could not confirm how many flights were delayed, but said it was safe to say hundreds.
FlightAware, an airline tracking website, said Southwest had delayed 775 flights, or 18 percent of its U.S. flights on Monday.
American Airlines, JetBlue Airways Corp, United Airlines and other carriers later said the technical issue had been resolved. JetBlue added it was still dealing with residual delays, while United said about 150 flights were delayed.
Last week, several airlines had reported issues with Sabre Corp's flight reservation and booking system due to which passengers had difficulty accessing flight check-in systems.
AERODATA GLITCH, PASSENGER STORM
Just a few minutes of system downtime in AeroData can result in over 100 delayed flights and loss of revenue, according to a 2017 case study by VMware Inc.
AeroData could not be immediately reached for comment.
Customers barraged Twitter with their complaints over confusion at airports and delayed flights.
One Southwest passenger reported waiting on the tarmac in a plane in Dallas for 90 minutes after his 6 a.m. flight to New Orleans was delayed. The airline said after the systems resumed that the flight would arrive at 8.05 a.m.
"@SouthwestAir, I get the glitch, but if you could update your flight status times to current status that would help confused travelers from running frantic to catch a flight when the plane is not even waiting at the gate yet. Flight 929 not 8:50 but 'around' 10 am," a passenger tweeted. https://bit.ly/2I4UPfV
"My number one traveling pet peeve? Not updating a flight as delayed when you know the prior flight is delayed. How hard is this to get right @AmericanAir?" said another frustrated passenger. https://bit.ly/2TOErlM
Other passengers reported long wait times at airports and missed connections.
(Reporting by Sanjana Shivdas in Bengaluru and David Shepherdson in Washington; editing by Patrick Graham, Bernard Orr)
The meat substitute manufacturer Impossible Foods and fast food giant Burger King are launching an Impossible Whopper.
According to a report in The New York Times, Burger King is launching the Impossible Whopper in stores in the St. Louis area with plans for a broader rollout later — and not as part of some elaborate April Fool’s day prank.
Burger King isn’t the first fast food chain to bring an Impossible burger to market. That’d be White Castle, which is selling Impossible sliders at stores in the Northeast.
But Burger King would certainly be the biggest slinger of ground beef to go with a meatless patty maker.
Impossible’s largest competition in the meat-substitute market, the publicly traded purveyor of purely beef free patties, Beyond Meat, has a similar deal with Carl’s Jr. for its own version of a beef-less burger.
The Silicon Valley-based Impossible Foods has been on a roll. They introduced a new version of their burger to much fanfare at the Consumer Electronics Show earlier this year, and have been locking in deals with higher-end fast casual restaurants and now large international fast food chains.
In the eight years since the company raised its first $7 million investment from Khosla Ventures, Impossible Foods has managed to amass over $389 million in financing — including a convertible note last year from the Singaporean global investment powerhouse Temasek (which is backed by the Singaporean government) and the Chinese investment fund Sailing Capital (a state-owned investment fund backed by the Communist Party-owned Chinese financial services firm, Shanghai International Group).
It remains to be seen if this is a harbinger of things to come for Burger King and whether the fast food giant will embrace other alternative meat companies like the providers of fake chicken or cellular based meat substitutes like Memphis Meats.
U.S. manufacturing activity rebounded a bit more than expected in March, according to an industry report released on Monday, as production, new orders and hiring all picked up.
The Institute for Supply Management (ISM) said its index of national factory activity rose to 55.3 from 54.2 in February, which had marked the lowest level since November 2016. The reading was slightly above expectations of 54.5 from a Reuters poll of 69 economists.
A reading above 50 indicates expansion in the manufacturing sector and a reading below 50 indicates contraction.
The employment index rose to 57.5 from 52.3 a month earlier. Expectations called for a reading of 52.4.
The new orders index rose to 57.4 from 55.5 in February. The prices paid index rose to 54.3, indicating that prices producers are paying for materials rose for the first time since December.
Production also picked up, with that index at ticking up to 55.8 from 54.8 the month before.
U.S. construction spending increased for a third straight month in February, boosted by gains in both private and public construction projects, offering some good news on the economy following a string of weak reports.
The Commerce Department said on Monday construction spending rose 1.0 percent to a nine-month high after an upwardly revised 2.5 percent surge in January.
Economists polled by Reuters had forecast construction spending falling 0.2 percent in February after a previously reported 1.3 percent jump in January.
Construction spending increased 1.1 percent on a year-on-year basis in February.
In February, spending on private construction projects rose 0.2 percent after vaulting 1.5 percent in January. Investment in private residential projects increased 0.7 percent, rising for a third straight month.
The strong gains are despite a sluggish housing market, which has been held back by higher mortgage rates, expensive building materials as well as land and labor shortages. But there are signs of green shoots emerging in the housing market as mortgage rates have declined from last year's lofty levels.
Spending on private nonresidential structures, which includes manufacturing and power plants, fell 0.5 percent in February after jumping 1.1 percent in January.
Investment in public construction projects rose 3.6 percent in February after accelerating 5.7 percent in the prior month.
Spending on federal government construction projects rose 0.9 percent to the highest level since October 2017, after soaring 5.7 percent in January.
Investment in state and local government construction projects rose 3.8 percent after surging 5.7 in January.
