‘My bad’: CEO takes blame for $2.8 billion typo

The CEO of a rideshare giant has accepted responsibility for a seemingly small typo that created a $2.8 billion shockwave.

The CEO of a rideshare giant has accepted responsibility for a typo in the company’s growth forecasts that sent its shares skyrocketing.

The CEO of a rideshare giant has accepted responsibility for a typo in the company’s growth forecasts that sent its shares skyrocketing.

Releasing its results for the year ended December 31, 2023 on Tuesday, Lyft – the second largest rideshare company in the US after Uber – announced a profit forecast for the 2024 year that featured one too many zeros – and sent the market into a frenzy.

The mistake saw Lyft’s share price skyrocket in a 45-minute period.

Its share price closed at US$12.13 before the release, but surged to a year-long high of US$16.77 in after-market trading in the 45 minutes following the announcement but before the mistake was identified.

That difference – of US$4.64 per share – increased the company’s market capitalisation by US$1.8 billion (A$2.8 billion).

The mistake made was that the company had predicted its gross profit margin would grow by 500 basis points (or five per cent) in 2024, but later realised that an extra zero had been added, with its growth actually likely to be 50 basis points (or 0.5 per cent).

An X user captured the mistake before it was corrected.

“First of all, it’s on me,” Lyft CEO David Risher told Bloomberg. “My bad … This was a bad error, but it was one zero.”

“This is a debacle of epic proportions,” Dan Ives, managing director at New York-based wealth management firm Wedbush Securities, told The New York Post.

“It’s a black eye moment that I haven’t seen in almost 25 years.”

Lyft CEO David Risher took ownership of the mistake. Picture: Michael Liedtke/Associated Press.

Roughly 47.8 million Lyft shares changed hands in the after-hours activity on US Nasdaq exchange, well above Lyft’s average daily volume of about 13.6 million shares.

Mr Ives said that investors are likely to file lawsuits against Lyft to recover any losses.

“I don’t believe we’ve heard the last of it,” he said. “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.”

Lyft’s 2023 full year results saw it record a gross profit of US$222.4 million, compared to a loss of US$416.5 million in 2022.

The improved result reflected heavy cost-cutting by the business, which sacked 1,200 workers in 2023 and a growth in rides fuelled by Taylor Swift’s Eras tour, Beyoncé’s Renaissance world tour, sporting events and airport rides.