- Wednesday, October 16, 2024
Lyft, the ride-hailing service, has been overshadowed by its larger rival Uber in recent times. However, newly appointed CEO David Risher has shown his confidence in the company by purchasing a significant number of Lyft stocks.
In 2022, Lyft stock (LYFT) experienced a significant decline of 74%, much worse than the 41% drop seen in Uber Technologies stock (UBER). Both companies have since rebounded in 2023, but Lyft’s recovery has been relatively modest, with stock rising by only 1% compared to Uber's impressive 80% surge.
Risher assumed the role of Lyft CEO on April 17 and wasted no time making impactful decisions. In his first month, he terminated approximately 1,100 employees, which accounted for around 26% of the workforce. Unfortunately, disappointing guidance for the following month caused Lyft shares to slide. Despite reporting strong second-quarter numbers on August 8, the shares were overshadowed by a mixed outlook, resulting in a decrease.
Seizing an opportunity amidst the struggling stock, Risher decided to invest $1.1 million on August 11 to purchase 100,000 Lyft shares at an average price of $11.46 each. In a form filed with the Securities and Exchange Commission, Risher disclosed that he now owns a total of 12.4 million shares, including restricted stock units.
When asked for comment, Risher expressed his belief in Lyft's potential, stating, "This is all about investing in Lyft as we build a very successful, very customer-obsessed business. Seeing this team in action shows me it’s the best investment I could make."
This transaction marks Risher's first open-market purchase of Lyft stock since becoming CEO. However, he has been a director at the company since July 2021. Prior to his role at Lyft, Risher held executive positions at Amazon.com (AMZN) and co-founded a nonprofit organization called Worldreader, which focuses on promoting reading for children.
Inside Scoop
Inside Scoop is a regular feature that covers stock transactions made by corporate executives, board members, prominent individuals, politicians, and significant shareholders. As insiders, these investors are legally obliged to disclose their stock trades with the Securities and Exchange Commission and other regulatory bodies.
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