TOKYO -- Japanese e-commerce group Rakuten on Monday said it will post a 110 billion yen ($990 million) profit in its first-quarter earnings from a jump in the value of its stake in Lyft, after the U.S. ride-hailing company went public on Friday.
Rakuten invested $700 million in Lyft since 2015 and held a 13% stake before the initial public offering. The ride-hailer's stock closed its first day of trading at $78.29, giving the company a market capitalization of more than $22 billion.
Rakuten's own stock price fell 3% on Monday following the announcement. It has surged more than 40% since the beginning of the year, partly due to expectations for a huge windfall from Lyft's IPO, as well as rising valuations of other portfolio companies like U.S. image sharing site Pinterest.
The investment gain will help to cushion expected pressure on Rakuten's profits from operations, as the online mall operator spends to launch a mobile network business. The company has not given earnings guidance for 2019.
