Lyft stock surges and falls on earnings report typo

0
19

It’s a truth universally acknowledged that typos can be embarrassing and frustrating. They can also, as ride-sharing company Lyft found out on Tuesday, make everyone forget that you actually had a pretty good year.

Everything started with Lyft’s press release announcing its fourth quarter and full-year 2023 financial results, which was published before the company’s call with investors. In the press release, Lyft said that its adjusted EBITDA margin expansion—which references the total dollar amount from ride transactions—would increase by 500 basis points, or 5%, in 2024.

Lyft stock soared more than 60% after the press release was published, reaching a high of $19.70 in after-hours trading. However, Lyft’s chief financial officer, Erin Brewer, quickly dragged investors off their cloud in the company’s earnings call, stating that the figure was supposed to say “50” basis points, not 500. This would indicate a 0.5% projected increase in growth, not a 5% increase.

“This is actually a correction for the press release,” Brewer said.

The company’s stock proceeded to tumble, dropping to at least $14.05 by Tuesday evening. Lyft was priced at $12.13 in early morning trading on Wednesday, down 2.18% from the previous day’s close.

“I’ve been doing this for 2 decades, and I don’t ever remember a mistake this bad on an earnings report,” CNBC tech journalist Ari Levy said in a post on X, formerly known as Twitter, on Tuesday.

Levy wasn’t alone in his shock. Many news stories about the gaffe followed, including the one you’re reading now. While the disastrous typo is certainly noteworthy, it also overshadowed a solid financial report from Lyft.

The company reported that gross bookings grew to $13.8 billion, a 14% increase year-over-year, while revenue grew to $4.4 billion, an 8% increase from last year. It also had more riders than ever in its history, with 40 million people using the service. Lyft said it expected to generate positive free cash flow in 2024 for the first time.

“We’ve entered 2024 with a lot of momentum and a clear focus on operational excellence,” Brewer said in the earnings call, per Bloomberg.

Too bad that no one will remember that because of a typo.

This article originally appeared on Gizmodo.

LEAVE A REPLY

Please enter your comment!
Please enter your name here