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Options Trades ($S and $LYFT) + Lyft Thesis
Today I closed out my $S calls at 50% profit, which I feel good about since I still have significant exposure to the stock with shares.
I rolled some of that cash into $LYFT calls, shown below.
I think that Lyft has been appropriately beat down for their past performance. However, I think the market is discounting some fundamental catalysts that could be on the short-term horizon for $LYFT.
Catalyst 1: Buyout
The Lyft CEO stopped short of saying they’re seeking a sale, but mentioned recently that while the company is “not on the block,” the ride-hailing company would be “open to offers”.
$LYFT would be a no brainer acquisition at this price for a self-driving car company (e.g, Amazon/Zoox, Motional, Apple, Mobileye, etc.) who wants an instantly available network app that is already on everyone’s phone. The company and shareholders would still demand a premium, which would certainly above the share price today.
Catalyst 2: Expanded Self-Driving Partnership
After $UBER’s recently announced partnership with Google’s Waymo, the pressure is now on Lyft to catch up or sell. I think that similar to Google/Bard after Microsoft launched OpenAI’s ChatGPT, that Lyft is likely to feel the pressure to announce an expanded partnership agreement if they don’t sell.
They already have a pilot program with Motional in Las Vegas, which they plan to expand, so an announcement about that would be bullish for the company. And the same goes for all of the companies I listed for a potential buyout - I think both Mobileye & Amazon/Zoox, among others, would be foolish to not strike a sweetheart partnership deal with Lyft while the iron is hot.

Jared Watson's avatar
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