Loop Capital said Lyft could be the next meme stock following a 17% jump Thursday on apparent rumors circulating on social media that the ride-sharing company could be a buyout target. Speculation that Lyft could be acquired by companies such as General Motors was floated by users on Twitter and StockTwits — a sudden burst of interest that Loop Capital believes could point to possible meme trading activity. “Lyft has fairly heavy short interest (12% short, 2.6-days to cover), which could invite ‘meme stock’ dynamics and attempts at manipulation from online forums,” analyst Rob Sanderson wrote in a Friday note. Lyft did not immediately respond to CNBC’s request for comment. Stocks that have previously gained popularity on online forums surged as retail traders piled into them. Some of the biggest examples of these so-called meme stocks are AMC, GameStop and Bed Bath & Beyond. The speculation comes as some investors believe that Lyft could be a strategic acquisition for companies, with General Motors the “most logical potential acquirer” of the ride-hailing company, according to Sanderson. “While we are suspicious on the validity of speculation, the idea of Lyft as a take-out target makes sense to us and has been a recent topic of conversation with investors. We think Lyft should be viewed as a strategic asset for several constituents, especially developers of autonomous driving technologies,” Sanderson wrote. “At 5.7x management’s target for $1B in adjusted EBITDA in 2024, we see potential for outsized upside in the stock whether by M & A or organic growth,” he added. The analyst reiterated a buy rating on Lyft, as well as a $31 price target that implies roughly 80% upside from where shares closed Thursday. The stock was last up 4%. —CNBC’s Michael Bloom contributed to this report.
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