A typo in Lyft’s earnings report overstated a key profit metric by a factor of 10 — sparking a 67% spike in its stock late Tuesday before management corrected the error and sent the shares tumbling.
Late Tuesday after the close of regular trading, the ride-hailing app told investors in an investor slideshow that its gross margin was expected to rise by 500 basis points — or 5% — this year.
On a conference call later, Lyft CFO Erin Brewer quickly backtracked on the forecast, telling analysts there was an extra zero in that figure and that the increase actually would be just 50 basis points — or 0.5%.
“This is a debacle of epic proportions,” Dan Ives, managing director at Manhattan-based wealth management firm Wedbush Securities, told The Post.
The stock price fell to $14.13 a share — an overall gain of around 18% from its closing price of $12.13.
As of early Wednesday morning, the stock was trading at around $16 a share.
Ives likened Lyft to the character Ted Striker from the 1980 hit comedic film “Airplane!” the alcoholic, war-traumatized former fighter pilot who takes the controls of a doomed airliner.
“It’s a black eye moment that I haven’t seen in almost 25 years in the street, to make an error like this,” Ives told The Post.
“And it overshadows what was pretty good results but when a pilot lands at the wrong airport it doesn’t send a sign of confidence to investors.”
Roughly 47.8 million Lyft shares changed hands in after-hours activity, according to Nasdaq.
That surpassed the stock’s average daily volume of about 13.6 million shares in the last 50 regular trading sessions, according to LSEG data.
Ives said that investors are likely to file lawsuits against Lyft to recover losses.
“I don’t believe we’ve heard the last of it,” he said.
The Post has sought comment from Lyft.
Lyft beat estimates for quarterly profit on Tuesday and said it would generate positive free cash flow for the first time in 2024, as it cut costs and became more competitive with larger ride share rival Uber.
Lyft cut total costs last year by 12%, from a year earlier, compared with a 28% surge in expenses in 2022.
Rides to stadiums grew more than 35% last year from 2022, mainly driven by Taylor Swift’s “Eras Tour,” Beyoncé’s Renaissance World Tour” and other sporting events, Lyft said.
With Post Wires
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
