By Sam Boughedda
In a note to clients Wednesday, a BofA analyst maintained an Underperform rating and $14 price target on Lyft (NASDAQ:LYFT) shares, telling investors that recent speculation regarding a takeover bid is driving the stock's outperformance.
"Lyft stock is up 14% since September 8 (vs. S&P down 3.7%), when an article in The Information 'Lyft's Future In the Spotlight' cited 'social media chatter' on a potential takeover bid, with the stock trading up 17% that day," explained the analyst.
He added that the social media chatter originated from the Twitter account "OracleNYSE," which tweeted: "Ford and GM seen weighing a bid for Lyft Inc. – Diligent."
The tweet only received 15 likes and three retweets but sparked a flurry of news articles from several large publications discussing the potential takeover bid.
"The news articles didn't have external sources to validate the potential takeover bid, only citing the tweet and generic 'social media chatter'. We noted in our recent Initiation report that Lyft could be a takeover target for autonomous vehicle developers and OEMs, but in our view, there seem to be little validation of takeover speculation either on Twitter or in the press," the analyst concluded.