Typo in Lyft earnings sends shares aloft nearly 70%
What a difference a zero can make.
Lyft shares enjoyed a short-lived pop after Tuesday's closing bell, surging as much as 67% after the company issued an outlook mistakenly projecting that its margins would expand an astounding 500 basis points.
Less than an hour later, the ride-sharing provider offered that the estimate had missed the mark — by a lot, with the real estimate at 50 basis points, or a half of a percentage point.
"This is actually a correction from the press release," Erin Brewer, Lyft's CFO, told an earnings call, less than an hour after the company issued its initial-and-quickly-corrected forecast in its fourth-quarter earnings report.
In an amended regulatory filing, Lyft called the misstated margin "a clerical error."
"For Lyft this, was a Ted Striker Airplane Moment and a debacle mistake that will be spoken about in Street circles for years to come," Wedbush analyst Daniel Ives said. "In decades on the Street, never seen anything like it, a black eye moment for Lyft."
The debacle brought a mea culpa from Lyft CEO David Risher, who took responsibility in a Wednesday appearance on CNBC. "Look, it was a bad error, and that's on me," he told the network.
Lyft realized its mistake on the earnings call as Wall Street analysts zeroed in on the company's surprisingly strong margins. When a Lyft employee realized the mistake, Risher said he could see her "jaw drop."
"Thank goodness we caught it pretty fast," the executive added.
After Tuesday's brief after-hours surge, Lyft shares reversed course as Brewer's correction was digested.
Lyft shares on Wednesday closed 35% higher as even the corrected earnings report was a good one, with Lyft tallying bookings that surpassed expectations.
Kate GibsonKate Gibson is a reporter for CBS MoneyWatch in New York.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
