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April 17, 2020 11:15 AM, EDT

Uber Withdraws Forecast, Will Write Down About $2 Billion

A driver in Los Angeles adjusts his face mask as Uber and Lyft drivers conduct a "caravan protest" outside the California Labor Commissioner's office April 16.A driver in Los Angeles adjusts his face mask as Uber and Lyft drivers conduct a "caravan protest" outside the California Labor Commissioner's office April 16. (Mario Tama/Getty Images)

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Uber Technologies Inc. withdrew its financial guidance for 2020 and said it will write down about $2 billion in investments after the coronavirus pandemic upended the ride-hailing business.

The San Francisco-based company said the writedown of its minority investments will range from $1.9 billion to $2.2 billion. Uber holds shares in various ride-hailing and food delivery businesses worldwide. The company valued holdings in China’s Didi Chuxing and Southeast Asia’s Grab at a combined $10.3 billion at the end of last year. It didn’t identify which investments were driving the charge.

A financial assistance program created by the company for drivers and delivery people coping with the effects of the virus will have a marginal impact on revenue. The result will be a $17 million to $22 million reduction in that quarter and $60 million to $80 million in the second quarter, Uber said.

Shares rose as much as 8.5% in extended trading after Uber’s statement April 16. Investors had been bracing for much worse. The stock took a nosedive in early March when the virus was spreading throughout the U.S. and Europe, but it has since recovered some of those losses. Uber assuaged many shareholders last month in a call with analysts drawing attention to its cash cushion of at least $4 billion.

Rides have fallen by as much as 70% in some of the hardest-hit cities, Uber has said. But the company could offset some of that shortfall with food delivery, which is experiencing a surge in demand as people stay at home.

Uber is scheduled to release its quarterly report May 7.

“Given the evolving nature of COVID-19 and the uncertainty it has caused for every industry in every part of the world, it is impossible to predict with precision the pandemic’s cumulative impact on our future financial results,” the company said in a statement.

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