Lyft You Up: Rideshare IPO Could Mean Big Payday for GM

Matthew Guy
by Matthew Guy

Back in 2016, General Motors invested half a billion bucks in Lyft, the rideshare company bent on taking Uber to school. When the deal was made, the companies portrayed it as a long-term strategic alliance. Since then, investments have been made in Lyft by GM’s competitors (namely Ford), and GM has made investments in potential Lyft competitors like Cruise Automation. Pro tip: don’t try to draw this particular family tree.

Today, Lyft went public on the stock market, seeing an astounding open of $87.24 a share. As a gearhead, why should you care about this? Well, remember that investment GM made in the company? The General now owns 18.6 million shares, which now translates into a net value of over $1.5 billion.

In a company besieged by idling plants and layoffs, suddenly finding an extra billion-and-a-half bucks on the books is surely a big deal.

It’s not as if GM can make like a Vegas winner and immediately cash out, however. To my understanding, the company cannot sell its stock for a period of six months after the IPO. Given market and socioeconomic volatility, who knows what Lyft’s stock price will be this autumn. However, some back-of-napkin math reveals that the stock would have to fall to just $26.88 in order for it to be worth less than the $500 million General Motors invested in the company three years ago.

Lyft’s stock is sure to fluctuate wildly over the days and weeks ahead before settling in to something remotely resembling an even keel. Since its IPO this morning, the price has bounced around like a proverbial rubber ball, currently sitting at $80.62 as of this writing. Even if GM eventually sells off some or all of its shares, it is unlikely they’ll sever ties with Lyft entirely.

You know all this has to rankle the corner offices in the Glass House, as Ford’s stock price has been languishing under $10 for ages. So far as they’re concerned, they’ve been innovating and powering their way to a portfolio of desirable vehicles only to see Wall Street reward yet another start-up (ish) company with gonzo valuations. It must be frustrating. For its part, GM stock sits around $37 today.

Keep in mind that GM also has its corporate fingers in the pies called Maven and Cruise Automation, so trying to tease out Lyft’s role in the company’s future plans is like trying to untangle a ball of fishing line that’s been sitting in the bottom of a tackle box for months.

Beyond General Motors, companies like Google (12.8 million shares) and Fidelity (about the same investment as GM) also stand to make a few bucks from Lyft. One thing’s for sure – the line between traditional automakers and new mobility solution companies is quickly being erased.

[Image: Lyft]

Matthew Guy
Matthew Guy

Matthew buys, sells, fixes, & races cars. As a human index of auto & auction knowledge, he is fond of making money and offering loud opinions.

More by Matthew Guy

Join the conversation
2 of 14 comments
  • Stuki Stuki on Mar 30, 2019

    Hence why the US as a leading place for manufacturing, and for productive enterprise in general, is by now merely an historical anecdote.

  • Civicjohn Civicjohn on Apr 01, 2019

    Well the stock lost 11% today, thanks Mary for not taking my advice, but I know $150 million is pocket change.

  • Rust-MyEnemy Whoa, what the hell is wrong with Jalop1991 and his condescension? It's as if he's employed by Big Plug-In or something."I've seen plenty of your types on the forums....."Dunno what that means, but I'm not dead keen on being regarded as "A type" by a complete stranger"" I'm guessing you've never actually calculated by hand the miles you've driven against the quantity of gas used--which is your actual miles per gallon."Guess again. Why the hell would you even say that? Yes, I worked it out. Fill-to-fill, based on gas station receipts. And it showed me that a Vauxhall Astra PHEV, starting out with a fully charged PHEV battery, in Hybrid mode, on my long (234-mile) daily motorway daily commute, never, over several months, ever matched or beat the economy of the regular hybrid Honda Civic that I ran for a similar amount of time (circa 5000 miles)."You don't use gasoline at all for 30-40 miles as you use exclusively battery power, then your vehicle is a pure hybrid. Over 234 miles, you will have used whatever gas the engine used for 200 of those miles."At least you're right on that. In hybrid mode, though, the Astra was using battery power when it wasn't at all appropriate. The petrol engine very rarely chimed in when battery power was on tap, and as a result, the EV-mode range quickly disappeared. The regular hybrid Civic, though, deployed its very small electric reserves (which are used up quickly but restore themselves promptly), much more wisely. Such as when on a trailing throttle or on a downward grade, or when in stop-start traffic. As a result, at the end of my 234 miles, the Civic had used less gas than the Astra. Moreover, I hadn't had to pay for the electricity in its battery.I look forward to you arguing that what actually happened isn't what actually happened, but I was there and you were not."Regardless, that you don't understand it appears not to have stopped you from pontificating on it. Please, do us all a favor--don't vote."You really are quite unpleasant, aren't you. But thanks for the advice.
  • Tassos Jong-iL Electric vehicles are mandated by 2020 in One Korea. We are ahead of the time.
  • 1995_SC Can you still get some of the tax credits under the new program?
  • Analoggrotto HyundaiGenesisKia saw this coming a long time ago and are poised for hybrid and plug-in hybrid segment leadership:[list=1][*] The most extensive range of hybrids[/*][*]Highest hybrid sales proportion over any other model [/*][*]Best YouTube reviews [/*][*]Highest number of consumer reports best picks [/*][*]Class leading ATPs among all hybrid vehicles and PHEVs enjoy segment bearing eATPs[/*][/list=1]While some brands like Toyota have invested and wasted untold fortunes into full range electric lineups HyundaiKiaGenesis has taken the right approach here.
  • EBFlex The answer is yes. Anyone that says no is just….. wrong.But the government doesn’t want people to have that much freedom and the politicians aren’t making money off PHEVs or HEVs. So they will be stifled.