A small error made a big impact.

Lyft shares experienced a sudden surge after the closing bell on Tuesday, skyrocketing by as much as 67% when the company mistakenly projected a remarkable 500 basis points expansion in its margins. However, less than an hour later, Lyft clarified that the projection was way off, with the actual estimate being only 50 basis points, or half a percentage point.

“This is actually a correction from the press release,” said Erin Brewer, Lyft’s CFO, during an earnings call shortly after the company issued its initial, and promptly corrected, forecast in its fourth-quarter earnings report.

In a revised regulatory filing, Lyft attributed the misstated margin to “a clerical error.”

Wedbush analyst Daniel Ives characterized the incident as a memorable blunder comparable to the iconic “Ted Striker Airplane Moment,” suggesting it would be a topic of discussion in financial circles for years. He remarked, “In decades on the Street, [I have] never seen anything like it, a black eye moment for Lyft.”

Following the brief surge in after-hours trading on Tuesday, Lyft shares reversed direction once Brewer’s correction was acknowledged.

On Wednesday, Lyft shares rebounded, reaching $16.40, up by $4, or 35%, reflecting optimism fueled by the company’s better-than-expected earnings report, particularly in bookings.

The error was nestled within a section of Lyft’s press release titled “FY’24 Directional Commentary,” which delineated the company’s aspirations for the upcoming year. One of the bullet points stated that Lyft’s “Adjusted EBITDA margin,” indicating its profitability from ride bookings, would advance by “500 basis points,” equivalent to a 5% improvement in 2024. Such a substantial increase would signify a significant leap in profitability, potentially resulting in hundreds of millions of dollars in additional profit for Lyft.

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