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One digit can have a significant impact.

After the market closed on Tuesday, Lyft’s stock saw a brief increase, jumping up to 67%, due to an error in their outlook which predicted a 500 basis point expansion in their margins.

The ride-sharing service updated their estimate to be significantly lower, by 50 basis points or half of a percentage point, less than an hour after the initial estimate was given.

The company’s financial performance in the last quarter, as stated in their earnings report.

Lyft stated in a revised regulatory document that the incorrect margin was a result of a clerical mistake.

According to Wedbush analyst Daniel Ives, the recent events at Lyft can be compared to the iconic scene from the movie “Airplane” where Ted Striker takes control of the plane. However, it was a major mistake that will be talked about in financial circles for a long time. Ives also added that in his many years on Wall Street, he has never witnessed anything like this and it has caused significant damage to Lyft’s reputation.

The controversy resulted in Lyft CEO David Risher taking full responsibility during an interview on CNBC. He acknowledged the mistake and stated, “I made a poor judgment, and I accept full responsibility for it.”

During the earnings call, Lyft acknowledged their error when Wall Street analysts pointed out the company’s unexpectedly high margins. According to Risher, a Lyft employee showed visible surprise when she realized the mistake.

“We were fortunate to catch it quickly,” the executive remarked.

Following a brief surge after Tuesday’s after-hours trading, Lyft’s stock experienced a reversal as investors processed Brewer’s correction.

On Wednesday, Lyft’s stock increased by 35% due to a positive earnings report, despite having been corrected. The report showed that Lyft had exceeded expectations in terms of bookings.

Kate Gibson