New activist stake in Lyft; More on the automotive tariff situation; Goods trade deficit hits all-time high; 'This too shall pass'; Check out the 'Becoming Katharine Graham' documentary
1) An activist stake in Lyft (LYFT) has caught my eye...
My old friend Arnaud Ajdler of activist hedge fund Engine Capital Management has taken a 1% stake in the ride-share company, has nominated two board members, and is pushing for big changes.
That includes "exploring all strategic alternatives," which usually means a sale of the company.
The market seemed to like what it heard, as LYFT shares rose 2.3% yesterday on the news.
Arnaud released a 41-slide presentation with this press release yesterday: Engine Capital Issues Presentation Highlighting the Case for Boardroom Change at Lyft and Opportunities for Meaningful Value Creation. Excerpt:
Engine's nominees – who have cumulatively served on 16 public company boards and who have exemplary track records of significant value creation – would advocate for eliminating the Company's dual-class share structure, de-staggering the Board, optimizing the balance sheet, reassessing equity compensation practices to reduce dilution, and exploring all strategic alternatives.
Regular readers will recall that I wrote about Lyft on February 10 and February 11, but I didn't think it was a buy.
That was fortunate – through yesterday's close, the stock is down 13% since February 11.
However, I think Lyft looks more interesting now that there's a well-respected activist involved...
Arnaud is correct in his critique of the company and I like the changes he's calling for – both summarized in this graphic from page 8 of the presentation:
But I wouldn't be in any rush to invest in Lyft...
I don't think anyone is going to buy the company, so I want to see if Engine will ultimately succeed in getting its two nominees on the board.
So for now, I'll keep an eye on the situation – and keep the stock on my radar to wait and see if it ends up looking more compelling.
2) Following up on yesterday's e-mail about the impact of tariffs on the auto industry...
As you likely heard, President Donald Trump ended up announcing that he would soften some of the automotive tariffs yesterday (the Wall Street Journal has more details in this article: Trump Softens Blow of Automotive Tariffs).
Meanwhile, a friend sent me a post by a blogger, Mr. Hale, who publishes the Automotive Risk Newsletter on Substack. Hale thinks even the reduced tariffs that Trump announced yesterday could be devastating to the industry.
Here's the post: Inside the Auto Tariff Battle: What Washington Is Not Saying Out Loud. And here's an excerpt:
The news is spinning a safe version of what is happening. They are missing the real pulse. Right now, April 2025, the Trump administration has dropped a hammer. A full 25 percent tariff on imported vehicles and parts. No trial balloon. No slow rollout. It hit like a freight train.
If you are inside the industry, you already feel it. If you are outside, you are about to.
As the post continues, "the big manufacturers are scrambling":
Ford, GM, Stellantis, they are lighting up K Street with lobbyists. The panic is not polite. It is real. Ford's CEO Jim Farley told a closed-door group that these tariffs could tear a hole through the American auto industry that we have never seen before.
It is not just manufacturers either. Suppliers are quietly telling lawmakers that if they have to absorb 25 percent more on critical parts, the entire supply chain buckles. Margins are already razor thin. There is no cushion to hide behind anymore.
It's an evolving, complex situation. And if any of my readers have insider insights into the industry, I would love to hear them as well!
I always enjoy getting feedback from my readers – folks often provide information I didn't know or insights I hadn't considered. You can send me an e-mail by clicking here.
3) An ironic impact of the tariffs is that, in the short run, they're massively increasing our trade deficit in goods as importers have scrambled to buy before they go into effect.
Take a look at this Bloomberg chart shared in a post on social platform X yesterday:
And in another post on X yesterday, Charles Schwab's Chief Investment Strategist Liz Ann Sonders shared this Bloomberg chart:
Keep in mind that this will soon reverse in a big way...
4) But don't panic – this too shall pass, as have other things that have roiled the markets in recent decades.
Take a look at this chart from Creative Planning's Charlie Bilello via this post on X yesterday:
5) I highly enjoyed the Becoming Katharine Graham documentary – it's about an amazing, pioneering woman who was both a mentor to and of Warren Buffett.
It's available on Amazon Prime here. Summary:
Becoming Katharine Graham tells the story of a painfully shy woman's accidental rise to power and how it changed history. After a family tragedy, Kay evolved from a "doormat wife" into a legendary newspaper publisher. Nixon's nemesis during Watergate, she fought for truth, broke barriers in a sexist world, and won a Pulitzer Prize, inspiring generations with her courage and resilience.
Here's the trailer, and here's an interview CBS News did with Buffett about her. I recommend checking it out!
Best regards,
Whitney