Lyft has about ~25 percent of the rideshare market in USA. They improved their operating structure and are almost break even on a GAAP basis.
I acknowledge that Lyft is a terrible company. But my question is why is Lyft this low? They are have 1B in net cash. Lyft does 1B in revenue per quarter, and in the last quarter it looks like they have significantly reduced stock based compensation.
They are trading at less than 1x their revenue multiple. If some PE firm wanted to acquire Lyft and lay off half its employees, then they would be profitable on day one.
I know this sounds naive. I just do not understand. I do not own Lyft, but that is because I feel like there is a lot that I do not know, and thus the question.
If Lyft were to get acquired, what would be a fair value? Morningstar says $25, but I think it depends on the entity that is acquiring. If it were someone like Waymo they could just pay for the data/selected talent and shut down the operations which are breakeven at best.
I do not like to trade zirp companies, but I dove deep into research because Rideshare is a duopoly and it was interesting to learn about strategy of Uber and Lyft. Amazing to see how well Uber out executed Lyft
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