What happened

Shares of Lyft (NASDAQ:LYFT) soared 22.3% during April, according to data from S&P Global Market Intelligence. That was enough to send the stock from about $27 per share to $33 per share.

April's strong stock gain comes on the heels of a dreadful March when Lyft shares tanked 29.6% from $38 per share to $27 per share due to the panic over COVID-19.

So what

The company has been fairly quiet about how its business has been faring lately, but it's been widely reported that the ridesharing business -- whether Lyft or Uber Technologies -- is doing dreadfully right now. Tech industry website The Information reported Lyft's ride-hailing business was down 80% year over year at one point but had improved to being down 75%.

A young woman in a city carrying shopping bags hailing a car.

Image source: Getty Images.

On April 21, Lyft announced it would be reporting its first-quarter earnings results on Wednesday, May 6. In addition, management wrote the following regarding its business:

The pandemic began to have a negative impact on business trends, including ride volumes, in mid-March, which has continued into April. On May 6, Lyft will provide an update on current business trends and the Company's response to COVID-19. This update will include detailed actions the Company is taking to strengthen its financial position, improve its cost structure, and support drivers and riders on the Lyft platform. In light of the evolving and unpredictable effects of COVID-19, Lyft is currently not in a position to forecast the expected impact of COVID-19 on its financial and operating results for the remainder of 2020. As a result, Lyft is withdrawing the annual revenue and adjusted EBITDA guidance it provided on February 11, 2020 for the fiscal year ending December 31, 2020.

With far fewer people needing rides for commuting, travel, and entertainment these days, it's not surprising that Lyft's business isn't doing well. 

Now what

The key question for Lyft investors is how much cash the company will burn while its business is suffering, and how long it could be before the business picks up in a material way.

Given the company had almost $2.9 billion of cash and investments as of the end of last year and no debt, and a highly variable cost structure, it seems likely the company will be able to survive and thrive over time