Lyft shares reverse course after incoming CEO says company not for sale
March 28 (Reuters) - Lyft Inc's (LYFT.O) shares were down 3% in mid-day trading on Tuesday after incoming Chief Executive Officer David Risher said the ride-hailing firm was not for sale.
The appointment of the new chief executive, who has run a non-profit for more than a decade, sparked some speculation that Lyft was preparing itself for sale. But Risher said "no" when asked in a Bloomberg interview if Lyft was for sale.
Wall Street initially cheered the management change at Lyft. The company has struggled to shake off a pandemic slump in its business and ceded market share to bigger rival Uber.
Lyft's shares initially rose about 8% in early trading as investors assessed the news of co-founders Logan Green and John Zimmer stepping down as CEO and president, respectively, handing the reins to Risher who has been a board member since 2021.
The step back by the co-founders increased the odds of a potential sale, some brokerages had noted, pointing to a nearly 90% decline in Lyft's market value since it went public in 2019.
"We see the transition signalling a strategic shift toward more proactive competition with Uber," Jefferies analyst John Colantuoni said, adding that Risher has an impressive track record of execution, albeit more than two decades in the past.
"The transition could cast additional uncertainty before we get greater visibility on the path forward."
Risher was among the first employees at Amazon.com Inc(AMZN.O) and served as the e-commerce giant's first head of product. Since 2009, he has focused on Worldreader, a nonprofit he co-founded to help boost reading among children.
Analysts said Risher, also credited with driving early growth at Microsoft Corp (MSFT.O), could herald a change in direction for Lyft whose focus on North America and ride-sharing has seen it fall behind a more diversified and global Uber Technologies Inc (UBER.N).
Risher's experience on Lyft's board also gives him a strong command of the business relative to the average incoming CEO, RBC Capital Markets said.
Rival Uber also had a CEO change in 2017, when it hired then Expedia Inc (EXPE.O) top boss Dara Khosrowshahi. The executive has been credited with mending Uber's image, repairing frayed relations among investors and improving finances.
But unlike Khosrowshahi, Risher lacks recent and relevant leadership experience, some analysts warned.
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