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New York CNN Business —  

Uber and Lyft were two of the most highly anticipated IPOs in recent memory. And both were duds.

Almost immediately, the ride sharing companies broke below their IPO prices. That’s committing the cardinal sin of the IPO world.

The high-profile flops demonstrate the need for money-losing companies to do a much better job explaining how they’ll eventually make money, according to Carter Mack, whose investment bank helped bring Uber (UBER) and Lyft (LYFT) public.

“The lesson of Uber and Lyft IPOs is that investors are looking for a clearer path to profitability,” Mack, president and co-founder of JMP Group, told CNN Business.

JMP (JMP), a San Francisco-based investment bank, was one of the dozens of firms that served as an underwriter on the IPOs. Mack couldn’t discuss details on the pricing strategy of the IPOs because the deals were led by larger Wall Street firms. Lyft’s IPO was led by JPMorgan Chase (JPM) and Credit Suisse (CS), while Morgan Stanley (MS) and Goldman Sachs (GS) led Uber’s.

Uber, which went public earlier this month, is still trading 8% below its $45 IPO price. And Lyft is stuck 21% below the $72 IPO price from its late-March debut. Retail investors who bought Lyft on its first day — when the stock spiked to as high as $88.60 — are staring at sizable paper losses.

“There was so much noise and hype that it was hard for them to live up to,” said Mack.

Plenty of red ink

While Uber and Lyft have enormous potential, Wall Street is worried about the companies’ hefty losses as they engage in an intense price war and fund new ambitions.