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  • 1440 Daily Digest

Lyft's Bot Bump

Lyft shares rose over 60% in after-hours trading Tuesday following the rideshare company's fourth-quarter earnings report that featured a typo in its 2024 forecast. The swing was said to be largely driven after hours by algorithms trained to analyze data and automatically execute the selling or buying of shares without human intervention (read more). 

Lyft's initial earnings report forecast its adjusted earnings margin to increase by 500 basis points, or 5%, in 2024, rather than the correct figure of 50 basis points, or 0.5%. The adjusted earnings margin is a closely watched profit metric that measures the company's adjusted earnings before interest, taxes, depreciation, and amortization (known as EBITDA) as a percentage of its gross bookings. A higher margin means Lyft earns a bigger share of adjusted earnings from the total transaction value invoiced to riders. Lyft, which went public in 2019, is not yet profitable but expects to see positive free cash flow (see 101) this year.   

The company's shares retreated within 30 minutes after a correction was issued, ultimately rising 35% on the (real) better-than-expected results.

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