- General Motors (NYSE:GM) shares did not enjoy a lift today from its $500M investment in ride-hailing company Lyft, but analysts generally see the deal as a long-term positive for GM.
- Susquehanna auto industry analyst Matthew Stover considers GM's move a learning play to understand how such companies operate, who uses them and get a better sense of the threat to the auto industry.
- The goal of Lyft and other ride-hailing companies of “redefining traditional car ownership" appear to run counter to GM's business model, but "from GM’s standpoint, it’s better doing this then building a Lyft competitor,” Stover says, adding that as pure investment strategy, GM is buying a stake in a highly valued company and stands to make some money from the introduction of rental hubs where GM will be the preferred provider of short-term vehicles to Lyft drivers.
- Citigroup believes the deal marks a clear positive for GM with the potential to re-rate the shares higher over time, supporting its view that the era of driverless cars likely will shift the balance of power to make some automakers relevant in the race to create a network of on-demand autonomous vehicles in the U.S., and that GM will emerge as one of the select players.
- Citi also view the news as a positive for Mobileye (MBLY), a key partner in GM’s autonomous car development.