How a CEO handled a $2B mistake

There were a "lot of eyes" on a recent financial press release from Lyft — but none of them caught an extra zero that temporarily sent the company's stock soaring more than 60%. 

David Risher, Lyft's CEO, addressed the mistake the next day on Bloomberg Television. In his opening statement, he took sole blame for what all those eyes had missed: "Well, first of all, it's on me." 

"There are a lot of eyes on this press release, but at the end of the day, my bad," Mr. Risher said. "But look, I don't want it to take anything away from the butt-kicking performance that the business did thanks to all of our employees and thanks to millions of drivers. I mean look, we had our financially strongest quarter we have ever had and I'm super excited about it." 

That press release has generated a lot of buzz since it dropped Feb. 13. The company's estimated gross margin was expected to grow by 50 basis points — but an extra zero on the document put the figure at an extraordinary 500 basis points. 

Lyft saw a brief $2 billion market cap before its CFO corrected the error on an analyst call, and the stock dropped from a post-market gain of 67% to 17%. 

But the following morning, Lyft's shares had surged more than 30%, as "the company posted strong earnings and investors are still convinced that there is still growth in rider demand," according to Bloomberg journalist Edward Ludlow.

It was a purely human error, according to Mr. Risher, who added, "We're not at the point where press releases can be written by AI, at least not financial press releases. No way." 

The slip-up has been widely discussed in the business world, from analysts to communications executives to CFOs. But so has Mr. Risher's response. The CEO has been celebrated for his swift apology and willingness to foot the blame — even in the face of what experts have called the largest clerical error they've ever seen. 

As one Inc. headline put it, "Lyft's CEO gave a humble 6-word response to a $2 billion mistake. It's a lesson in emotional intelligence."

Mr. Risher did not publicly denounce any one employee or department, other than himself. Instead, he ate the extra zero himself; pointed out the wins his employees had cashed throughout the quarter; and explained that the company was taking steps to avoid another mistake of this caliber. And by sacrificing his ego, he might have shifted public perception ever so slightly in Lyft's favor — or at least his own. 

"We go through hours and hours of checking and double checking before something like this goes [public]," Mr. Risher said. "It's an unacceptable error. Again, ultimately it's on me — I'm the CEO, the buck stops with me."

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