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BenzingaEditorial

Believe it or not, Uber and Lyft’s Are on a Wild Ride Despite COVID-19!

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Uber Stock Market Today

Ride hailing services Uber and Lyft entered 2020 gunning for profits, but the spread of coronavirus in the U.S. is feared to threaten those plans as companies throughout the globe are facing unforeseen challenges. Due to governments imposing self-quarantine to Americans and Europeans  in an effort to contain the spread, the demand for ride hailing is also expected to plunge. But the outbreak is also believed to highlight important distinctions between the two fierce competitors, moreover the business model differences between Uber (NYSE:UBER) and Lyft (NYSE:LYFT) and reveal which one is more resilient. Yet, despite the initial drop and quite a dramatic one as Uber shares fell about 50% this year and Lyft 65%, the end of last week ended up being a wild ride as Uber’s shares rose 38 percent last week and Lyft followed with 29 percent.  And it’s all because of Uber’s analyst call where the CEO confidently stated that the company has enough cash to get through pretty much anything that 2020 might bring. Confident indeed as the pandemic will also amplify their weak spots- and we already know some of them.

Markets crashing

As the outbreak wreaks havoc on financial markets, and threatens to upend the economy, even the Dow Jones Industrial Average plummeted in its worst single-day crash since 1987. Neither of the two ride hailing companies issued a revision of their financials when all this started. When the pandemic was ‘only’ beginning to be in the air, it seemed like people were shifting to Lyft or Uber from other modes. But things went downhill pretty fast and that quickly stopped being the case, especially since a significant chunk of their business belongs to airport rides with flights being cancelled and airports in Europe closed. As for Uber, an estimated 15% of trips are attributed to airport rides. If plummeting demand for flights serves as a rough indicator, airport trips should see a corresponding dramatic drop in demand. And that is immense as United Airlines Holdings Inc (NASDAQ:UAL), JetBlue Airways Corporation (NASDAQ:JBLU) and Southwest Airlines Co (NYSE:LUV) referred to the impact of coronavirus as even worse than 9/11, and this impact will last for months to come. Only last week, Uber has already seen ride volume drop 70 percent  in cities most affected by the outbreak and the pandemic is yet to reach its peak.

So, all this confidence does seem a bit surprising especially considering Uber’s CEO Dara Khosrowshahi evaluated the coronavirus at the beginning of March as “not material” because geographies affected at the time contributed only partially to  its main business. That was the case before the World Health Organization (WHO) declared coronavirus a global pandemic.

And it used to be so good…

On March 4, Lyft CFO Brian Roberts joyfully revealed that last week was the single biggest week in Lyft’s history, both when it comes to revenue and rides. Lyft was already doing great since early February, when Uber moved its profitability target to the end of 2020 and the increased investor confidence brought Lyft along. Lyft has targeted the end of 2021 to reach the same goal. Both competitors were focused at growing top-line results and fortifying their bottom line to reach profitability in the near future.

Uber at least has Uber Eats to its rescue

It’s a supply problem as well as a demand problem, Even food delivery is better for drivers or at least perceived as better since he impression is it’s less risky –you’re grabbing a bag of food, you can wear gloves if you want, or there’s  a no-contact feature where you can drop deliveries off at the door.” And COVID-19 will only further emphasize the different business models as it tests their resilience

While Lyft sells personal mobility services and that includes offering car, scooter and bike trips in the U.S. only. On the other hand, Uber has a food delivery business and a freight logistics division, Uber Eats and Uber Freight respectively. And it is this segment that could only amortize its coronavirus-related EBIDTA losses.

Lyft’s new meal delivery option

Lyft announced it will be offering delivery of critical medical supplies and meals in this critical time. Target groups include the elderly, those living with chronic diseases and students who usually get subsidized lunches through school.

The underlying problem is far greater

An immense material hit is certain. But any hit to both Uber and Lyft’s whole fiscal year (2020) results is likely to push profitability timelines. Both companies acknowledged in their annual reports that a “pandemic or an outbreak of disease or similar public health concern, such as the recent coronavirus outbreak” could materially affect their results. The coronavirus had also led to production delays with bikes, scooters and automobiles that are crucial to their business. And unfortunately, we already know with certainty there is no company who will be unharmed as the global economy will be hit far more than initially anticipated. Perhaps the most dangerous thing is that they were invented to support a lifestyle that won’t be possible for quite some time as the world is forced to adopt a much slower pace. and Considering human psychology, who knows how consumer behaviour will change after spending weeks and maybe even months in isolation. For the better or worse, we’re all in this together. The two companies also need to find ways to protect their employees as Uber already urged the Congress to include its drivers in the financial assistance program. But when it comes to the short-term, liquidity is key in any crisis and Uber’s $10 billion in unrestricted cash as of the end of February is beyond comforting for the time being. But nothing will ever be the same once all this is over- nor it should be as we’ll hopefully learn a lot from this and use it as an opportunity to improve current practices.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

BenzingaEditorial

The EV Industry Is Worth More Than The Traditional Automakers

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Many things that were considered to be impossible actually happened in 2020. One of them is that electric vehicle makers became more valuable than traditional automakers and by about by about $100 billion, according to Barrons. EV makers are now worth about $1.3 trillion whereas traditional car makers combined have a market capitalization of about $1.2 trillion. This figure includes 100 auto makers around the globe with market caps ranging from $10 million all the way to Tesla’s (NASDAQ: TSLA). Based on its fully diluted share count, Tesla is worth about $1 trillion.

This feat is even more impressive if you consider that this is a much smaller industry based on actual number of cars. The last year taught us that the connection between the stock market and the economy is imprecise at best. However, the fact that technology enabled batteries to overpass ICEs is the kind of disruption that investors look for. Even though Tesla is the main contributor to the value of the EV market, the overall image is just as impressive as three of the top five most valuable are EV makers, with Tesla being followed by NIO (NYSE: NIO) and BYD (OTC: BYDDF). As for traditional automakers, Volkswagen (OTC: VWAGY) and Toyota (NYSE: TM) are the most valuable ones with both undergoing serious investments into electrification.

Traditional automakers are going electric

On Friday, BMW said it aims to double its sales of fully-electric vehicles this year. Including plug-in hybrids, it aims for a 50 percent increase in sales of electrified vehicles versus 2020. It did not give sales volumes for its fully electric vehicles but in data released on Tuesday, BMW said it sold close to 193,000 electrified vehicles, including fully electric and plug-in hybris in 2020. As a reminder, Tesla delivered almost half a million all-electric models last year, which is 75% of General Motor’s (NYSE: GM) third-quarter deliveries.

The automotive industry is at an inflection point

BEVs take approximately 1% of the total market for light vehicles, but the figure rises to about 3% if we include hybrid and plug-in hybrids. Why exactly it takes a relatively small market share to disrupt an industry is a bit of a mystery, but one reason is that more investment capital tends to flow in when market share come is within the 3% to 5% range. As more capital drives more innovation and improvement, investors are lured by high growth rates, bringing in even more capital and this is how success is made. Over the past year, EV makers have raised more than $20 billion in fresh capital, which is a fraction of what traditional auto companies spend on plants and equipment. However, on a per car basis, the EV industry is investing at roughly 10 times the rate of the traditional industry. Add to this President Joe Biden’s aim of a carbon-free future by 2035 and the drive toward adoption of EVs which is already seeing impressive results in Europe, the all-electric future is around the corner.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Europe and EVs- A Blossoming Relationship

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Tesla (NASDAQ: TSLA) delivered around 96,000 units to the key European EV market in 2020. But in Europe, Tesla’s cars were overtaken in popularity by Volkswagen (OTC: VWAGY) and Renault (OTC: RNLSY). Sales of electric vehicles by European car makers accelerated rapidly in 2020 amid severe fines for car markers whose fleets don’t meet new emissions targets and generous incentives for buyers to trade in their ICE vehicles.

Volkswagen

Volkswagen reported it delivered 212,000 electric cars across the globe in 2020, which is 158% more than in the year prior. 134,000 of those vehicles were battery-electric vehicles, which grew 197% compared with 2019. Volkswagen also said that its ID. 3 model was the top-selling car in Sweden in December by absolute numbers. All-electric Volkswagen models were on top the Netherlands and Germany, taking approximately 23% of each country’s BEVs market.

Mercedes Benz

On January 8th, Mercedes-Benz-owner Daimler (OTC: DDAIF) said that the brand sold more than 160,000 plug-in hybrids and all-electric vehicles in 2020, representing growth of more than 228% from 2019. The share of EVs in Daimler’s sales mix rose drastically from 2% in 2019 to more than 7% in 2020. Also, Mercedes-Benz brand remained the world’s top-selling luxury carmaker for the fourth consecutive year.

Renault

Renault reported that it doubled its electric-vehicle sales in Europe. While group sales fell more than 21% in 2020, its EV sales grew 100% growth from 2019 to 115,888 vehicles. Moreover, total orders at the end of December 2020 were up by 14% compared to December 2019, which was attributed to new hybrid offerings. EVs were the only good news in an otherwise bleak 2020 for the French carmaker, which underperformed both global and European car markets. At the very least, Renault avoided fines as it met its 2020 EU emissions targets. On January 14th, its chief executive officer Luca de Meo will present a strategy update which is expected  to include reviving some older best-selling models as all-electric models.

BMW

BMW (OTC: BMWYY) which also owns Mini, said that its two brands combined sold 192,646 electric vehicles in 2020 marking an increase of nearly 32% from last year. BMW also met its 2020 EU emissions targets.

Takeaway

European governments have created generous incentives to speed up the adoption of EVs, making them much more affordable. Come 2025 when emission targets become more stricter and threat of fines for not respecting them even greater, Tesla will certainly be playing against fully-fit opponents and could even potentially struggle. An EV-only future looks closer than ever in Europe as the race is now on to challenge Tesla’s leadership.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Lenovo Makes Its Star Market Debut

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The COVID-19 pandemic had completely changed the way people work and learn. Operating from home actually turned around declining PC sales. Smartphones have been picking more and more market share from PCs and if there was no pandemic, this would probably still be the case. But instead of decreasing demand, there was record growth in PC sales as video collaboration software was needed to fulfill the need caused by closed offices and schools. The demand generated months and months of production. According to Reuters, sales of desktops, laptops, and tablets are expected to reach the level of 300 million shipments, the first time after its peak in 2008. This made all the PC manufacturers like Dell Technologies Inc. (NYSE: DELL), HP Inc. (NYSE: HPQ), and Lenovo Group Ltd. (OTC: LNVGY) very happy.

Lenovo CDR story

China’s Lenovo Group is listed at the Hong Kong stock exchange, with about 12.04 billion shares outstanding in total as of January 12th. The company decided to issue Chinese Depository receipts (CDRs) which will be up to 10% of the total number of shares to be listed on the Star Market of the Shanghai Stock Exchange. The proceeds from the issuing of CDRs is planned to help the company’s research and development of new technologies, development of new products and solutions, and overall strategic investments in core segments. On Wednesday, the news caused to stock to drove the stock to its highest level since 2015.

The Star Market

The Star Market was launched in 2019 aiming for innovative technology companies that need more relaxed listing rules. In December, the Star Market counted 200 companies. A CDR or Chinese Depositary Receipt is a way for non-Chinese companies to list their shares in China. This is the equivalent to American depositary receipts (ADRs) which allow non-U.S. companies’ shares to trade on American exchange markets. Technically, CDRs and ADRs are not companies’ shares, but they represent an equity interest in a company. Besides Lenovo, an AI startup that specializes in facial recognition called Megvii Technology Ltd will also be among the first companies to benefit from this new structure.

Conclusion

Lenovo’s listing should be a breakthrough for Shanghai’s Science Technology and Innovation Board. Lenovo, a flagship of the Star Market, should attract much more followers and clear a path for many Chinese start-ups to raise capital in their home country. The company’s strong and growing global presence should continue to demonstrate the boom of China’s capital market and attract more investors to invest.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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