Why Aphria, Spotify and Lyft Collapsed Today – The Motley Fool

US stocks lost some of their recent gains on Monday, as the Q1 earnings season began in earnest. Both Dow Jones Industrial Average and S & P 500 incurred modest losses of about 0.1%.

But some individual actions have become even worse. Aphria (NYSE: APHA) withered after publishing weak quarterly results, Spotify (NYSE: SPOT) jumped a beat after reports of a potential competitor entering his niche, and Lyft (NASDAQ: LYFT) abandoned following the recall of electric bikes from three major markets.

The disappointing district of Aphria

Aphria shares fell 14.9% after the Canadian cannabis company reported weaker-than-expected financial results for the third quarter of 2019. Revenues climbed 617% year-over-year to C $ 73.6 million ($ 55.3 million), resulting in a significant net loss of $ 108.2 million ($ 81.3 million) , or $ 0.43 per share ($ 0.32).

Aphria's losses were magnified by significant non-cash depreciation charges related to its acquisition of LATAM's assets last September. Excluding these expenses, its net loss would have been C $ 50.2 million or $ 0.20 per share. But this was still well below the analysts consensus forecast for earnings C $ 0.03 per share on C $ 85.2 million revenue.

Aphria President and Acting CEO, Irwin Simon, said the company is taking "decisive steps to increase its efficiency," including investing in automation and packaging, and adapting its production to new methods of manufacturing. culture. But given the sharp losses of Aphria in the meantime, it is obvious that the market is not satisfied.

Spotify faces more competition

Spotify shares fell 4.4% after Display panel reported Amazon.com (NASDAQ: AMZN) is preparing to launch a free, ad-supported version of its streaming music service.

Quote "sources familiar to the plan" Display panel indicates that the Amazon service could be launched as early as next week, leveraging tens of millions of its Echo smart speakers sold to help the free service to multiply. This decision would mark a change from Amazon's previous strategy of offering only two ad-free music services: Prime Music as part of its Amazon Prime and Amazon Music Unlimited subscriptions at a fixed monthly rate.

If one thing is clear, it is that Amazon has an attractive audience group to target. Spotify has finished the year 2018 with 207 million active users per month, including 116 million users of its free level.

Lyft brakes the bikes

Finally, Lyft's shares fell 6.3% after the transit network specialist recently recalled e-bikes belonging to its fleets in New York, Washington and San Francisco, following "d & # 39; a few "complaints about" stronger braking forces than expected on the front wheel. "

However, some investors worry that the problem is more serious than what Lyft lets appear. a separate New York Times A report (which may require a subscription) indicates that dozens of people have been injured with the bikes in recent months.

Lyft, for its part, replaces bikes recalled by models without engine in the meantime. However, if these concerns continue to grow, the company's expansion plans could be disrupted, including the investment of $ 100 million, more than three times the size of New York's Citi Bike fleet, to reach 40 million dollars. 000 bicycles by 2024.