TOKYO -- 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 U.S. 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.