On paper, Lyft Inc. seems like a fairly logical acquisition target: Its shares have taken a serious beating, its founders have stepped back and it is dwarfed by Uber Technologies Inc. in its market.
And indeed, the prospect of a Lyft LYFT takeover seems top of mind on Wall Street these days, according to Bernstein analyst Nikhil Devnani. “Almost every investor conversation we have on [Lyft] these days lands on a discussion of whether the business could be acquired,” he wrote Thursday. On one hand, “the cumulative [free-cash-flow] burn would tell you that it can be equally expensive to replicate [Lyft], with execution risk,” he noted, in which case “having a ride-share network could be strategically valuable in deploying autonomous vehicles down the road.”