Shareholders of Lyft were taken on a wild ride last night in the US after the ride-hailing firm made a $620 million (£500 million) error in its results.
Investors piled into the stock in after-hours trading on Wall Street, after Lyft claimed its margins were set to grow by “500 basis points”, which is five percentage points, this year.
That would suggest profits of about $911 million.
Shares soared as high as $19.70 — up by 62% from yesterday’s close — before Lyft admitted it made a mistake. In a corrected release, it said margins will actually grow by 50 basis points, or 0.5 percentage points, suggesting profits around $290 million.
The stock crashed back to earth, wiping about $2 billion off Lyft’s market value.
But investors were still encouraged by strong demand for rides to and from “high-attendance stadium events” like Taylor Swift concerts, which helped 2023 bookings reach $13.7 billion. The shares finished the after-hours trading session up 16% — that’s 160 basis points rather than 1,600 — at $14.05.
“In 2023, the Lyft team set ambitious goals and the results speak for themselves,” said CEO David Risher, in both the original and corrected announcements.
“We reached the highest level of annual riders in our history, delivered over 700 million rides, and helped drivers take home over $8 billion.”
“Lyft’s outstanding Q4 performance demonstrates our team’s incredible work to build a solid foundation for profitable growth,” said CFO Erin Brewer. “We’ve entered 2024 with a lot of momentum and a clear focus on operational excellence, which positions the company to drive meaningful margin expansion and our first full-year of positive free cash flow.”
