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Strategies & Market Trends : Speculating in Takeover Targets
ULBI 9.800-2.0%Jun 24 4:30 PM EDT

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To: richardred who wrote (3936)5/16/2015 8:53:57 AM
From: richardred  Read Replies (1) of 7058
RE-TWTR/ICAHN update Take note of his original statement.
>snip “Twitter is great,” Mr. Icahn announced in his first message on Twitter. “I like it almost as much as I like Dell.”

Carl Icahn Invests $100 Million in Lyft


A Lyft car in San Francisco last year. Credit Justin Sullivan/Getty Images

For years, Travis Kalanick, chief executive of Uber, has been the loudest public voice on how ride-hailing start-ups will upend the transportation industry.

Now comes Carl C. Icahn.

Mr. Icahn, one of Wall Street’s most outspoken activist investors and aggressive Twitter users, announced on Friday that he had invested $100 million in Lyft, the fast-growing ride-booking start-up and single largest competitor to Uber in the United States.

Along with an additional $50 million from other investors that Lyft did not disclose, the new investment is an extension of a $530 million round that the start-up raised in March, which values the company at $2.5 billion.

“There’s room for two in this area,” Mr. Icahn said in a phone interview on Friday. “What I’m saying is there is a secular change going on with the way people are getting around, and with urbanization, it means more people living in urban areas.”

John Zimmer, Lyft’s president and co-founder, said the company planned to use the capital to continue growing in the United States, while honing the company’s smartphone app. The company, which is based in San Francisco, has previously hinted at international expansion, though Lyft has not announced any plans to move abroad.


“They reached out to us and I found the opportunity very compelling,” the investor Carl Icahn said of Lyft’s pitch to him. Credit Chad Batka for The New York Times Lyft and Uber have been raising money at a breakneck pace. To date, Uber has raised more than $5 billion, and is currently in discussions to raise another $1.5 billion, a person with knowledge of the talks has said, potentially valuing the company at $50 billion — 20 times that of Lyft’s current valuation.

More surprising is Mr. Icahn’s involvement, which underscores how institutional investors like hedge funds and mutual funds are all looking to invest in privately held tech companies. Mr. Icahn rarely invests in closely held start-ups and will be a strange bedfellow to some of his Lyft co-investors, particularly Marc Andreessen, the co-founder of the venture capital firm Andreessen Horowitz. Mr. Andreessen once called Mr. Icahn an “evil Captain Kirk,” a reference to the “Star Trek” character.

The two seem to have set aside their differences. Speaking about his spat with Mr. Andreessen, Mr. Icahn said, “I never said he wasn’t a smart guy.”

“To hold a grudge on Wall Street you have to be a fool,” he added.

With the Lyft investment, Mr. Icahn has negotiated a board seat for Jonathan Christodoro, a managing director of Mr. Icahn’s hedge fund, Icahn Enterprises. Mr. Christodoro will join Scott Weiss, a partner at Andreessen Horowitz, who also sits on Lyft’s board.

The $100 million investment came about through a connection between Mr. Christodoro and Mr. Zimmer of Lyft, who both did their undergraduate studies at Cornell University. Lyft then called to pitch Mr. Icahn.

“They reached out to us and I found the opportunity very compelling,” Mr. Icahn said in the interview.

Mr. Icahn has long invested in public tech companies, often having contentious relationships with his portfolio companies. Once labeled a corporate raider for his abrasive style, Mr. Icahn typically buys up stakes in public companies and then rattles the board for change, pushing for bigger windfalls for investors and often getting his way. He has hounded Apple to buy back more shares and make use of its cash hoard. In April, after Apple agreed to buy back $30 billion of stock under pressure from Mr. Icahn, his response was that the company could do “a lot more, sooner.”

Last year, Mr. Icahn pushed for a partial spinoff of the electronic payments business PayPal from its parent, eBay, spurring a vitriolic war of words with the company. EBay later decided to split PayPal and its marketplace unit into two different companies. In 2012 and 2013, Mr. Icahn called Netflix shares undervalued and pushed for a sale.

He has also faced off against Edward J. Zander, the former chief executive of Motorola, pushing him to find ways to give more back to shareholders. And Mr. Icahn engaged in a grueling battle with Michael S. Dell to prevent Mr. Dell from taking his computer company private at what was deemed too low a price.

As much an entertainer as a serious investor, Mr. Icahn is well versed in using the media — and more recently, social media — to help prevail in his battles. He was among the first hedge fund managers to use Twitter to make his voice heard.

“Twitter is great,” Mr. Icahn announced in his first message on Twitter. “I like it almost as much as I like Dell.”
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