Lyft's CEO Says 'My Bad' on Margin Error, 'It Was One Zero' (yahoo.com) 22
Lyft Chief Executive Officer David Risher's response to a clerical error that unintentionally inflated the company's earnings outlook on Tuesday and sent shares soaring: "My bad." From a report: "First of all, it's on me," Risher said in an interview with Bloomberg Television on Wednesday, taking the blame for a typo in a company press release Tuesday that erroneously projected a particular measure of earnings margin to expand by an eye-watering 500 basis points. (In reality, Lyft expects margins to grow by 50 basis points.) "This was a bad error," he said, "but it was one zero in a press release."
The typo, which actually appeared in multiple company documents on Tuesday, helped drive a 67% surge in Lyft's shares in after-hours trading. The mistake was a serious one, Risher said. But it shouldn't take away from Lyft's "butt-kicking" financial performance, he said. Risher said his team at Lyft was taking the error very seriously and noted it was corrected "within seconds of finding it." But in fact, on a call with analysts to discuss the quarterly results, Lyft executives didn't immediately note the error in their opening remarks. Lyft Chief Financial Officer Erin Brewer just began referring to the company's outlook for a 50-basis-point expansion. It wasn't until later in the call, when an analyst pointed out the discrepancy, that Brewer acknowledged her outlook was "actually a correction from the press release."
The typo, which actually appeared in multiple company documents on Tuesday, helped drive a 67% surge in Lyft's shares in after-hours trading. The mistake was a serious one, Risher said. But it shouldn't take away from Lyft's "butt-kicking" financial performance, he said. Risher said his team at Lyft was taking the error very seriously and noted it was corrected "within seconds of finding it." But in fact, on a call with analysts to discuss the quarterly results, Lyft executives didn't immediately note the error in their opening remarks. Lyft Chief Financial Officer Erin Brewer just began referring to the company's outlook for a 50-basis-point expansion. It wasn't until later in the call, when an analyst pointed out the discrepancy, that Brewer acknowledged her outlook was "actually a correction from the press release."
You put a 1 and two zeroes in front of that... (Score:3)
I just kept thinking of this Futurama bit [youtube.com] when I read about that one zero.
Re: (Score:2)
Come on! Trust the scientific concept! In science, a margin of error less or equal to an order of magnitude in a prediction is very acceptable.
Evasive CFO (Score:5, Insightful)
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There may soon be that sulfurous scent of an SEC investigation wafting in your nearest Lyft.
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Ya, but that would throw light on their "accidental" market manipulation -- I mean typo. /cynical
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To prove deliberate market manipulation, you'd have to show that they or someone they are associated with happened to sell a bunch of shares around that time. Wouldn't be hard to audit that .. look at the list of whoever sold more than a certain number of shares.
Re: (Score:2, Interesting)
If you make an error that makes you seem untrustworthy, don't just bulldoze through using the corrected figure like nothing happened. You start the call saying "Hey everyone, just to talk about the press release -- we know there was an error and apologize. It's actually 50, not 500, and we've corrected the press release. Please do not use the 500 number as it's a typo error. " Not doing this probably tells you a lot about the integrity of the CFO.
We all knew Lyft execs were scum anyway. Using basis points instead of percent to sex up the numbers is pretty lame. Just say .5% like a normal person. I've never heard anyone use basis points for anything other than interest rates.
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You make it sound like the error is important. The reality is that people who trade on press releases deserve what they get. There were financial documents released which don't have the error concurrently with the press release.
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Someone with a low IQ doesn't "deserve" to be rich?
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Someone with a low IQ doesn't "deserve" to be rich?
No one deserves to be rich. It should be something that is earned, not gifted to them by dumb luck (in this case the literal sense of I'm to dumb to know how to invest properly) or crawling out of the correct womb.
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Isn't it the other way around. Everyone deserves to be rich, but nobody is owed someone to make them rich.
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Traders have accepted the risk of the rare case of mistakes in press releases, because
paycheck (Score:4, Funny)
Please make this one extra zero mistake on my paycheck. I want to see how you feel then.
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Same way a bank feels. They just charge it back, and screw you if you were stupid enough to spend the money. You're fully responsible for overdraft fees.
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My bad, it was one zero, not really material.
Gains outweigh fines (Score:4, Insightful)
Feels pretty scummy to me.
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What did they gain? Did Lyft executives, or their associates, sell shares between the time of that press release and when they corrected it?
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If they made over $10mil with their error
Companies don't "make money" when their share price increases. Investor capital and profit are not the same thing, especially since the latter is normally given to those who put in the former.
There was no benefit to Lyft from this mistake.
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Did anyone sell during the run up? (Score:2)
fire him (Score:1)
We fired our CEO over one 0 that led to inflated reports. That kind of error also led to the firing of 90% of the rest of the staff because there was no cash to pay them. He should be promptly ejected. The staff like me who were actually profitable stayed on and kept things going for years after with a new competant CEO.
Check who made a profit on this (Score:2)
And maybe one Lyft CEO will go to prison. Or not.