On Tuesday, Rakuten Inc. (OTCMKTS:RKUNF) indicated that it expects an impairment loss of $947 million on its investment in Lyft Inc. (NASDAQ:LYFT) in the quarter ended September.

Rakuten reports impairment loss due to declining Lyft shares

The online services provider’s CEO and founder Hiroshi Mikitani Seats on board of the US ride-sharing company. The company reported the impairment as a result of Lyft shares dropping significantly in the quarter. Rakuten has indicated that it has been using an equity method in the investment in Lyft. The company indicates that the loss will be reported as a “share of loss of investment attributed to the application of equity method” in its quarterly report.

Rakuten, which is the largest shareholder in the ride-hailing company with around 11% stake, will announce its earnings on Thursday. The company considered that since the price of Lyft stock has dropped significantly, the considerable evidence that the investment is impaired. The deductions are based on the closing price of the stock at the end of the quarter in September

The latest loss adds to the 28.4 billion yen the company reported in the second following a change in the method of accounting applying to Lyft shares. Lyft has been burning cash in the past quarters same with fellow industry rival Uber Technologies Inc. (NYSE:UBER), which is yet to turn a profit. Rakuten indicates that it measured its Lyft investment on fair value through loss and profit.

Rakuten expects double-digit growth in YoY revenue

Rakuten expects to offer improved guidance when it reports its earnings report on November 7. The company anticipates double-digit growth in revenue compared to last year. This excludes securities business results impacted significantly by the stock market.

In an earnings presentation last week, Lyft indicated that there was an increase in the number of customers paying full price for the rides. The company also provides an improved outlook that indicated that it is on the path towards profitability by 2021. The company has seen its stock drop over 40% since it went public in March.