What Lyft and Altice Asset Sales Say About the Art of the Deal

The deal business is definitely picking up—if only from troubled companies unloading stuff to raise cash. Take reports today that Lyft is looking to sell its bike-share business and that French-controlled cable firm Altice USA is contemplating ditching its Cheddar News financial news streaming channel. Both Lyft and Altice are in a bad way—as symbolized by their stocks falling 80% and 90%, respectively, over the past two years—which surely explains why they’re trying to sell assets they bought in more optimistic times. Chances are both companies will take a bath on their investments, if only because asset prices generally have fallen in the past couple of years. 

By the same token, though, neither the bike rental or streaming businesses were great businesses when Lyft and Altice bought their way into those sectors back in 2018 and 2019, respectively. The bulk of Lyft’s bike business is Motivate, a startup that cost Lyft $250 million to buy in 2018. At the time of the purchase, the startup was facing growing competition in key markets from a bunch of smaller rivals in both bike sharing and scooter rentals, as this story from The Information detailed. Motivate’s owners at the time, who included billionaire Jeff Blau and Dan Doctoroff, then CEO of Sidewalk Labs, no doubt saw the writing on the wall. Their wisdom in selling is apparent in hindsight. While Motivate’s rivals in the so-called micromobility business, Lime and Bird, each raised money at valuations of $2 billion in 2019, their businesses nosedived when Covid-19 struck in 2020. Fast forward to today and both companies are limping along. Bird, after going public, is now valued at just $100 million!