—— Uber Revenue Growth in Doubt; Shopify Posts Surprise Loss; Pandemic Winners Lost $1.5tn; Apollo Lines Up $1.1B Acquisition Loan; FTSE 100 Breaks Record Highs; Apple Loses Almost All Top Designers; Rivian Loss Exceeds Forecast
1. Uber Revenue Growth in Doubt
Uber Technologies Inc. reported that first-quarter gross bookings fell short of analysts’ expectations due to weaker demand in Latin America and the impact of earlier holidays on orders.
The company, based in San Francisco, announced that gross bookings, which include ride hails, delivery orders, and earnings for drivers and merchants but exclude tips, increased by 20% year-over-year to $37.7 billion. This figure was below both the company’s own forecast from February and the average analyst prediction of $38 billion. However, revenue met expectations.
The company’s Chief Financial Officer, Prashanth Mahendra-Rajah, attributed the shortfall in bookings to a decrease in ride-hailing activity in Latin America, contrasting with the high demand seen during last year’s return of Brazil’s Carnival. He also mentioned in his prepared remarks that holidays like Easter and Ramadan starting earlier than usual affected the quarter’s results.
Uber’s shares dropped as much as 10% in premarket trading following the announcement.
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2. Shopify Posts Surprise Loss
Shares of Shopify Inc. fell sharply after the Canadian e-commerce firm reported an unexpected net loss in the first quarter, following the divestiture of its logistics operations last year.
The company recorded a loss of $273 million, a significant decline from a profit of $68 million in the same period last year. The loss per share was 21 cents, with revenue totaling $1.86 billion, according to a statement released on Wednesday.
Shares traded in the U.S. plummeted 18% in premarket trading in New York.
After a surge of more than 120% last year, Shopify’s stock has faced challenges this year, particularly after forecasting higher-than-expected operating expenses for the quarter. The stock dropped as much as 2.7% in U.S. trading on Tuesday and has remained roughly unchanged in 2024, underperforming compared to the Nasdaq 100 Index.
The company is navigating a challenging economic landscape and subdued consumer spending, exacerbated by its recent sale of its logistics business to Flexport, which has also impacted its financial performance.
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3. Pandemic Winners Lost $1.5tn
50 companies, which initially thrived during the coronavirus pandemic, have seen their market value decrease by approximately $1.5 trillion since the end of 2020. This decline occurred as investors shifted their focus away from stocks that had seen significant gains during the early stages of the lockdowns.
Most of these companies are in the technology sector and were among the top 50 firms, each with a market value over $10 billion, that experienced the highest percentage increases in 2020. However, according to Financial Times analysis using Bloomberg data, these early pandemic beneficiaries have collectively lost over a third of their total market value since then.
Zoom, the video-conferencing company, experienced a tremendous surge in its share price in 2020, with an increase of up to 765% as businesses transitioned to remote work during the pandemic. However, it has since become one of the biggest losers in the market downturn, seeing significant declines from those peak levels.
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4. Apollo Lines Up $1.1B Acquisition Loan
Apollo Global Management Inc. has secured $1.1 billion in debt financing for its acquisition of US Silica Holdings Inc., according to sources familiar with the matter. Barclays Plc and BNP Paribas SA are leading the financing efforts, the sources said, requesting anonymity as they are not authorized to speak publicly.
The market for acquisition-related leveraged loans has been relatively quiet this year, constituting just 8% of the total launch volume, as per Bloomberg data. This scarcity has driven investors to explore other market segments, contributing to a rise in average prices in the secondary market to two-year highs. This shift has also enabled many junk-rated borrowers to reduce their interest expenses by repricing existing loans.
Apollo, Barclays, and BNP have all chosen not to comment on the matter. US Silica has not responded to requests for comment.
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5. FTSE 100 Breaks Record Highs
UK blue chip stocks achieved their longest streak of record closing highs since early 2023, with European equities also reaching new highs, contrasting with a slight decline on Wall Street.
The FTSE 100 in London rose by 0.5% on Wednesday, marking its fourth consecutive record close—the longest series of successive highs since February 2023, based on an analysis from the Financial Times using LSEG data.
The pan-European Stoxx 600 index also ended the day up by 0.3%, recording back-to-back record highs for the first time since late March.
In other European markets, Germany’s Dax increased by 0.3% and France’s Cac 40 grew by 0.7%.
Meanwhile, U.S. stocks experienced a dip, with the S&P 500 down by 0.1% and the Nasdaq Composite falling by 0.2% during midday trading in New York.
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6. Apple Loses Almost All Top Designers
The departure of Duncan Kerr, one of the last remaining members of Apple Inc.’s legendary design team led by Jony Ive, marks a significant shift at the company. Kerr, who has been with Apple since 1999, played a crucial role in the development of multiple generations of key products such as the iPhone, iPad, and Mac.
Sources familiar with the situation, who chose to remain anonymous as the information has not been made public, confirmed that Kerr has informed Apple of his upcoming departure. This exit nearly completes the turnover of the team responsible for some of Apple’s most groundbreaking innovations in music players, smartphones, tablets, and smartwatches.
Many members of Apple’s design team have joined LoveFrom, the new design company founded by Jony Ive. LoveFrom is collaborating on projects with notable companies such as Airbnb Inc., Ferrari NV, and Moncler SpA.
Although Ive has been less visible in Apple’s public activities in recent years, he made an appearance alongside Apple CEO Tim Cook and Laurene Powell Jobs for a joint interview in 2022.
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7. Rivian Loss Exceeds Forecast
The demand for electric vehicles (EVs) has recently slowed, triggering a fierce price war that is challenging even Tesla Inc., a leader in the industry. This price competition is particularly harsh for newer EV companies, turning their market presence into a struggle for survival.
This was highlighted by the recent disappointing quarterly results from several promising electric vehicle startups. Analysts and investors have been concerned that falling EV prices would disproportionately affect smaller, unprofitable carmakers. Rivian Automotive Inc. and Lucid Group Inc., two of the most prominent among these, reported losses that were wider than expected.
These companies are facing significant financial challenges, losing a considerable amount of money on each vehicle they sell, which underscores the tough market conditions for new entrants in the EV industry.
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, and Bloomberg.