The executives at Lyft are left with a red face after a typo was found in the financial results of the ride-hailing service. This led to a nearly 70 per cent increase in its share price.
Lyft announced that it would grow its margins by a much higher percentage than anticipated in the coming year, going up five percentage points compared to last year.
Investors were excited about the figures, and the stock soared 67 percent to $19.70 on Wall Street in late trading Tuesday night. However, Lyft had to issue a correction explaining that it added an extra zero to its adjusted earnings prior to deductions.
Lyft stated that the correct number is “approximately” 50 basis points per year, not “500 basis point”. For the rest of the session, the shares traded between $14.30 and $14.40. According to Nasdaq’s data, nearly 48 million Lyft stock shares were traded in the short late-night trading session, compared to a daily average of 14 million.
David Risher (58), the CEO of Lyft said that the typographical error in the earnings announcement was “on me”. Bloomberg reported that he said: “This is a terrible mistake.” It was a zero in a news release.
Since its stock market debut in 2019, Lyft has seen its share price plummet by almost 80 percent. The company was founded by Logan Green and John Zimmer in 2012. They were backed by Andreessen Horowitz and Alphabet.
Lyft is expecting to have positive cashflow next year for the first-time, due to its plans to reduce spending and increase bookings. The company forecasts that the total bookings in the first quarter would range between $3.5 and $3.6 billion. It also expects to record earnings adjusted before deductions between $50 and $55 millions.
Risher stated: “We delivered over 700 millions rides and helped drivers take home more than $8 billion.”
Yesterday night, the shares were up again. They closed at $16.39, up 35.1%, or $4.26. This valued the company at over $6.5 billion.