What happened
Shares of Lyft (NASDAQ: LYFT) jumped today, seemingly on rumors circulating about a potential buyout on Twitter and StockTwits, with GM as a possible buyer. The stock may also have been reacting favorably to New York's decision to end its mask mandate on transportation, which could help give the ridesharing operator a shot in the arm.
Lyft stock finished the day up 16.9%.
So what
Rumors about the buyout were unsubstantiated and didn't appear in any news source, but on Twitter and StockTwits, several users were discussing the possibility of a takeover by companies including General Motors, DoorDash and Ford.
The chatter may be representative of more fantasy than reality at this point, but it wouldn't be surprising for Lyft to put itself up for sale, given the stock's longtime struggles. It's easy to see the ridesharing company attracting a number of buyers, as it's essentially one-half of a duopoly with Uber in the U.S. ridesharing market.
GM invested $500 million in Lyft back in 2016 and reportedly offered to buy the start-up back then, but it declined, so it's possible that the carmaker would come back to the bargaining table.
There's also an argument for a deal with DoorDash, as that tie-up would essentially match Uber's offer of combined mobility and delivery services.
As for Ford, the carmaker had agreed to deploy its Argo AI self-driving vehicles on the Lyft network.
Now what
Without any substantiation to the rumor, investors should just treat it as just that, and there's a chance the company will come out and deny that it has any plans to sell itself.
Still, with the ridesharing stock languishing, it could make sense for the company to consider a potential sale, especially if there are enough interested parties to start a bidding war.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends DoorDash, Inc. and Twitter. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
