Claudiad
Prompted by a press release discrepancy that was quickly corrected, shares of Lyft (NASDAQ:LYFT) soared more than 60% after the bell Tuesday before falling back to the unchanged line in a matter of minutes.
Excitement and Correction
The company reported earnings postmarket and traders focused on forward guidance that included a prediction of positive free cash flow in 2024.
But the press release issued at 4:05 p.m. ET included guidance of “Adjusted EBITDA margin expansion (calculated as a percentage of Gross Bookings) of approximately 500 basis points year-over-year.” (Emphasis added.)
However, soon social media posts noted that Lyft’s CFO had corrected that to 50 basis points. A Lyft spokesperson confirmed to Seeking Alpha that the original press release was in error and the correct figure was 50 basis points.
As of 5:30 p.m. ET, the earnings release on Lyft’s site had not been removed or corrected.
Wild Swings
Volatility has since declined and LYFT is higher by 18%, near $14.30. But shares had traded as high as $20.03 before sinking to $12.71 seven minutes later.
Algorithmic trading could have exacerbated the postmarket move, keying in on the 500-basis-point margin forecast. Lyft has short interest of 13.47%.
