Is Lyft For Sale? This Analyst Believes Takeover Rumors Have 'Little Validation'

Zinger Key Points
  • If Lyft is for sale, Amazon, Alphabet, Ford and GM are likely acquirers.
  • There is “little validation” that a deal is in the works, one analyst says.
Is Lyft For Sale? This Analyst Believes Takeover Rumors Have 'Little Validation'

Lyft Inc. LYFT stock has significantly outperformed peers, rising 14% on a potential takeover bid, despite no sources validating these speculations, according to Bank of America Securities.

The Analyst: Michael McGovern maintained an Underperform rating for Lyft, with the price target unchanged at $14.

The Thesis: Although the San Francisco-based company is a takeover target for “autonomous vehicle developers and OEMs” and speculations are rampant on Twitter and the press, there is “little validation” in either of these channels, McGovern said.

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Amazon.com Inc. AMZN, which owns Zoox, and Alphabet Inc. GOOGL, which owns Waymo, are reportedly potential acquirers.

“Amazon & Alphabet would likely face antitrust headwinds, and ridesharing would add another regulatory battle (independent contractor classification) to their existing regulatory scrutiny,” the analyst wrote.

There are also speculations of bids from Ford Motor Co. F and General Motors Co. GM. “For GM/Ford, a strategic acquisition would likely not be necessary to commercialize their autonomous vehicles, which could be done with in-house networks (Cruise and Argo AI),” McGovern stated.

LYFT Price Action: Shares of Lyft had declined by 1.22% to $16.66 at the time of publication Wednesday.

Posted In: BofA SecuritiesMichael McGovernAnalyst ColorM&AReiterationAnalyst Ratings