How a Small Mistake Made Lyft's Shares Go Up 60%

Lyft's Shares Go Up 60%
How a Small Mistake Made Lyft's Shares Go Up 60%

by Tanushree Jaiswal Last Updated: Feb 19, 2024 - 10:25 pm 307 Views
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What If I tell you, a company's stock shot up by a whopping 70% just because of a tiny zero? 

Well, Lyft, the American ride-hailing company and Uber's rival, had quite the rollercoaster. Their shares rocketed over 60% on Tuesday but then took a nosedive. 

The reason? A little mistake in their earnings report made the future look ten times rosier than it really was. 
Oops!

In a press release, 

The company initially claimed it would boost adjusted earnings margins by 500 basis points in 2024. This led to Lyft's stock surging to over $20, the highest price since August 2022. However, the excitement was short-lived as CFO Erin Brewer clarified on a call with investors that the increase would actually be 50 basis points.

Brewer noted, "This is actually a correction from the press release," and despite the correction, Lyft shares rose by 35.1% on Wednesday.


“First of all, it’s on me," CEO Risher said in an interview on Wednesday, taking the blame for the error. 

“This was a bad error," he said, “but it was one zero in a press release.", he said
Risher said that the small blunder should not overshadow the company's robust financial performance. The company reported a 17%  increase in gross bookings.  surpassing estimates at $3.72 billion.

The company reported a 17% increase in its gross bookings in Q4 compared to the previous year, reaching $3.72 billion which was higher than the analysts estimates of $3.67 billion.
 

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.

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Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
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