Rakuten to book $990 million profit from Lyft IPO

Japanese company Rakuten on Monday stated it will post a 110 billion yen ($990 million) profit in its first-quarter revenues from an increase in the value of its stake in Lyft, after the U.S. ride-hailing company went public on Friday.

Rakuten spent $700 million in Lyft since 2015 and owned a 13% stake prior to the initial public offering. The ride-hailer’s stock closed its first day of trading at $78.29, giving the firm a market capitalization of over $22 billion.

Rakuten’s own stock price dropped 3% on Monday after the announcement. It has surged over 40% since the starting of the year, partly because of expectations for a huge windfall from Lyft’s IPO, along with rising valuations of other portfolio companies such as U.S. image sharing site Pinterest.

The investment gain is going to help to cushion expected pressure on Rakuten’s profits from operations, because the online mall operator spends to start a mobile network business. The company has not given revenue guidance for this year.