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

Tanushree Jaiswal

Last Updated: 19th February 2024 - 10:25 pm

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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