A typo in Lyft’s earnings report exaggerated a key profit metric by a factor of 10, sending the stock soaring 67% late Tuesday before management corrected the error and the stock price plummeted.
Late Tuesday after the close of regular trading, the ride-hailing app said in a slideshow to investors that its gross profit margin is expected to increase by 500 basis points (5%) this year.
In a subsequent conference call, Lyft Chief Financial Officer Erin Brewer quickly retracted her forecast, telling analysts that the number had an extra zero and that the actual increase was only 50 basis points, or 0.5. He said it would be %.
“This is an epic failure,” Dan Ives, managing director at Manhattan-based asset management firm Wedbush Securities, told the Post.
The stock price fell to $14.13 per share, an overall increase of about 18% from its closing price of $12.13.
As of early Wednesday morning, the stock was trading around $16 per share.
Ives likened the lift to Ted Striker, the character from the 1980 hit comedy film “Airplane!” A former fighter pilot, an alcoholic and traumatized by war, assumes control of a doomed airliner.
“I’ve never seen anyone make a mistake like this and get black in the face in about 25 years on the street,” Ives told the Post.
“And while that masks a pretty good result, if the pilot lands at the wrong airport, it doesn’t send a signal of confidence to investors.”
According to Nasdaq, about 47.8 million shares of Lyft were traded in after-hours trading.
That was higher than the stock’s average daily volume of about 13.6 million shares over the past 50 regular trading sessions, according to LSEG data.
Ives said investors will likely sue Lyft to recover their losses.
“I don’t think we’ve heard the whole thing yet,” he said.
The Post has reached out to Lyft for comment.
Lyft on Tuesday beat quarterly profit expectations and said it will have positive free cash flow for the first time in 2024 as it cuts costs and strengthens its competitive position with ride-hailing rival Uber.
Last year, Lyft reduced its total expenses by 12% year-over-year, but in 2022 expenses jumped 28%.
Lyft said stadium attendance increased more than 35% last year from 2022, driven primarily by Taylor Swift’s Elas Tour, Beyoncé’s Renaissance World Tour and other sporting events. .
with post wire
