Shares of ride-hailing app Lyft (NASDAQ: LYFT) tumbled more than 27% in extended trading.
Ouch, why though?
The company said it will spend more aggressively to increase its driver supply, which led to expected operating earnings of less than 25% of analysts’ expectations.
A spillover effect
Shares of rival Uber (NYSE: UBER) consequently fell more than 11% before gaining back some of the losses. Uber investors will be keen to see whether the company faces similar challenges as Lyft, or if these challenges are unique to Lyft for one reason or another.