Rakuten books $240m write-down on Lyft investment, CEO Mikitani exits board

REUTERS/Yuya Shino

Japanese e-commerce group Rakuten announced Monday a 25 billion yen ($237 million) write-down on its investment in Lyft, with CEO Hiroshi Mikitani resigning from the board of the US ride-hailing company.

Mikitani decided to step down as a Lyft director “in order to devote his time to the management of [Rakuten] under the uncertain environment of COVID-19,” the Japanese company said in a statement. The billionaire Rakuten founder had sat on Lyft’s board since 2015.

Rakuten is Lyft’s top investor, with a stake of just over 10%. The Japanese company will reclassify Lyft from an equity-method affiliate — which allowed Rakuten to book a portion of the unit’s earnings as its own — to a simple financial investment based on Mikitani’s departure from the board, which will reduce Rakuten’s influence on management.

Lyft shares will be held at fair value after the change.

Lyft went public in March 2019, and Rakuten booked a roughly 110 billion yen profit on its stake in the January-March quarter of that year.

Rakuten decided to upgrade Lyft to an equity-method affiliate in the second quarter of 2019 in an attempt to generate operational synergies. But Lyft’s share price has underperformed since its initial public offering.

Rakuten turned in a 27.4 billion yen net loss for the first half, down from a 100.2 billion yen profit from a year earlier. It has not released full-year guidance, but market analysts predict a loss.

This story was first published on Nikkei Asian Review

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.