Typos have consequences. But this one sent shockwaves through the stock market

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Fortunes are made and lost on Wall Street based on getting accurate information quickly.

This point was illustrated when this company sent a report with what appeared to be a minor typographical error.

But this one little typo sent Wall Street into a frenzy that caused a stock to shoot up and crash.

Lyft shares hit a 52-week high after serious typo

In the world of finance, every number counts, and that proved to be true this week after tech company Lyft’s shares hit a 52-week high.

The company’s stocks soared after an earnings release stated that its profit margins were expected to go past 500 basis points, or 5 percentage points, in 2024.

Originally, the margin was expected to expand by 50 basis points, but an extra 0 completely changed the game.

However, Lyft’s chief financial officer clarified and corrected the mistake on a later call with analysts.

Lyft’s stocks soared over 60% once the release came out after the close of regular trading.

Many of these types of trades are performed by computers, which react in mere fractions of seconds to any new information.

The margin likely triggered a buying frenzy on Wall Street before people got clarification.

Lyft Chief Executive David Risher spoke to CNBC in an interview, saying, “It was a bad error, and that’s on me.”

He also said the company has a process in place designed to handle these types of releases, which includes “thousands of eyes” and that the extra zero was completely missed.

Risher said the situation was “super frustrating for everyone and the team,” and that he didn’t want the mistake to take away from Lyft delivering its best financial quarter in the company’s history.

Lyft shares rose as much as 38% to $16.77 in morning trading after the incorrect earnings release. 

Meanwhile, the company does expect to see higher-than-expected bookings for the current quarter, and it expects to be cash flow positive this year.

Shares of the company’s stock have been volatile, with four of the past five quarterly reports sending its stocks tumbling by double-digit percentage points.

While earnings typos like this are rare, they do happen every so often.

However, serious market watchers said they could not remember the last time a major stock reaction occurred due to a typo.

Mistake causes a social media frenzy

Several people reacted to the Lyft error on social media, posting jokes, and memes on the platform X.

One X user wrote that Lyft “saved themselves $7m by not paying for a Super Bowl commercial and got free marketing at tonight’s earnings call. Smart.”

Another user wrote, “Your margin Lyft has unexpectedly canceled, we apologize for the inconvenience,” which was a take on the message Lyft riders see when a driver cancels.

Despite the mistake, J.P. Morgan said it was encouraged by strides Lyft has made to help encourage stronger demand and higher profits.

However, they also said that steady execution “will be required for Lyft to truly differentiate itself from a brand perspective and take share.”

Informed American will keep you up-to-date on any developments to this ongoing story.