By Aditya Soni (Reuters) -Lyft Inc’s shares rose more than 6% on Tuesday as Wall Street cheered a management change at the ride-hailing firm that has struggled to shake off a pandemic slump in its business and ceded market share to bigger rival Uber. Lyft said on Monday co-founders Logan Green and John Zimmer would […]
Lyft shares jump as Wall Street welcomes CEO change
By Aditya Soni
(Reuters) -Lyft Inc’s shares rose more than 6% on Tuesday as Wall Street cheered a management change at the ride-hailing firm that has struggled to shake off a pandemic slump in its business and ceded market share to bigger rival Uber.
Lyft said on Monday co-founders Logan Green and John Zimmer would step down as CEO and president, respectively, handing the reins to David Risher who has been a board member since 2021.
Risher was among the first employees at Amazon.com Inc and served as the e-commerce giant’s first head of product. Since 2009, he has focused on Worldreader, a nonprofit he co-founded to help boost reading among children.
Analysts said Risher, also credited with driving early growth at Microsoft Corp, could herald a change in direction for Lyft whose focus on North America and ride-sharing has seen it fall behind a more diversified and global Uber Technologies Inc.
“We see the transition signalling a strategic shift toward more proactive competition with Uber,” Jefferies analyst John Colantuoni said, adding that Risher has an impressive track record of execution, albeit more than two decades in the past.
Risher’s experience on Lyft’s board also gives him a strong command of the business relative to the average incoming CEO, RBC Capital Markets said.
The step back by the co-founders increases the odds of a potential sale, some brokerages noted, pointing to a nearly 90% decline in Lyft’s market value since it went public in 2019.
Lyft’s shares were trading at $10.20 on Tuesday.
Rival Uber also had a CEO change in 2017, when it hired then Expedia Inc top boss Dara Khosrowshahi. The executive has been credited with mending Uber’s image, repairing frayed relations among investors and improving finances.
But unlike Khosrowshahi, Risher lacks recent and relevant leadership experience, some analysts warned.
“The transition could cast additional uncertainty before we get greater visibility on the path forward,” Colantuoni said.
(Reporting by Aditya Soni and Tiyashi Datta in Bengaluru; Editing by Shounak Dasgupta)
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