The Strategist

Carl Icahn sold his stake in Lyft to George Soros before IPO

04/05/2019 - 12:19

Carl Icahn got rid of his stake in Lyft - Uber's main competitor in the United States - before the company entered the stock exchange. Icahn invested $ 150 million in Lyft four years ago and held its stake. On the eve of the company's IPO, it was estimated at $ 550 million.

American billionaire Carl Icahn sold his share in the Lyft Inc. taxi call service (2.7%) on the eve of the initial public offering of the firm’s shares on the stock exchange. This was reported by The Wall Street Journal, citing informed sources.

The buyer of the share was another American billionaire George Soros, the source said. The transaction’s amount has not been disclosed. Based on the price of the initial public offering, the package can be valued at $ 550 million, writes WSJ.

Icahn invested in Lyft in 2015. At first, he invested $ 100 million, and soon poured another $ 50 million. At that time, the company was estimated at $ 2.5 billion. Former managing director of Icahn Capital (he worked there until 2017) Jonathan Christodoro was the billionaire’s representative on the board of directors of Lyft and also invested in company (his personal stake in Lyft is estimated at $ 900,000). In March, he left the board of directors. Icahn could have appointed another representative to replace him, but he did not.

Icahn was holding the stake in the company for four years, and this is a “relatively long period” for an investor-activist, The Wall Street Journal notes. It is unclear why he decided to part with the asset. According to the publication's interlocutors, the billionaire was unhappy that Lyft introduced two types of shares before the IPO, thanks to which the company's founders Logan Green and John Zimmer began to control almost 50% of the votes, although they own less than 5% of the shares.

The net loss of Lyft in 2018 was more than $ 911 million. Nevertheless, during the initial public offering, the company was valued at $ 24 billion. On March 29, the company's shares jumped in price to $ 87.24 per share, but by April 3 fell in price and traded below the placement price ($ 70.31 per share).

Lyft is Uber's main competitor in the market for mobile applications for ordering a taxi in the United States. Uber plans to hold an IPO in the second half of 2019. In October 2018, Goldman Sachs and Morgan Stanley estimated Uber at $ 120 billion, the WSJ reported.