LYFT shares plunge as analyst casts doubt on takeover speculation

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Lyft($NASDAQ:LYFT) shares plunged 5.5% on Monday, at least partly due to an analyst downplaying recent takeover speculation around the ride-sharing firm. On September 8, Lyft shares jumped 17% amid vague takeover speculation that was being promoted on social media. However, in a note to clients on Monday, analyst Doug Anmuth said that while a deal could not be completely ruled out, he saw “no clear rationale” for a takeover of Lyft by a larger company.

Price History

On Wednesday, LYFT shares opened at $16.8 and closed at $15.9, a drop of 5.5% from the previous closing price of $16.9. This followed news that an analyst had cast doubt on speculation that the company could be acquired by a larger rival. So far, the news has been mostly positive for LYFT.

However, the analyst’s comments have spooked some investors, causing the stock price to drop. It remains to be seen how the company will fare in the coming days and weeks.

VI Analysis

The company’s fundamentals reflect its long term potential. The following analysis on Lyft is made simple by the VI app. According to the VI Star Chart, Lyft is classified as a ‘cheetah’. This is a type of company that has achieved high revenue or earnings growth, but is considered less stable due to lower profitability. High growth companies are deemed more volatile as they attempt to grow faster.

Lyft is strong in growth, medium in asset and weak in dividend, profitability. Lyft has a low health score of 2/10 with regard to its cashflows and debt. This means that it is less likely to safely ride out any crisis without the risk of bankruptcy.

Summary

So far, the news has been mostly positive for LYFT, with the stock price moving up the same day. However, this latest development could cause some investors to rethink their position in the company.