Lyft, the popular ride-hailing company, experienced a rollercoaster ride in the stock market on Tuesday. An error in its earnings report caused a significant overstatement in a key profit metric, leading to a surge in its stock price before the mistake was corrected and shares tumbled. The incident has been described as a "debacle of epic proportions" by industry experts.

The typo in the earnings report resulted in the inflation of a profit metric by a factor of 10. This error, initially interpreted as positive news by investors, triggered a sudden 67% spike in Lyft's stock late on Tuesday. However, once management rectified the mistake, the stock price plummeted, reaching $14.13 per share - an overall gain of approximately 18% from its previous closing price of $12.13.

As Wednesday morning dawned, Lyft's stock was trading around $16 per share, indicating a partial recovery from the abrupt drop. Nasdaq reported a significant increase in after-hours trading, with approximately 47.8 million Lyft shares changing hands - a staggering number compared to the stock's average daily volume of 13.6 million shares during regular trading sessions.

Despite the turmoil, Lyft exceeded earnings expectations for the quarter and announced its plans to achieve positive free cash flow for the first time in 2024. The company attributed this progress to cost-cutting measures and improved competitiveness in relation to its larger ride-sharing rival, Uber. Lyft managed to reduce total costs by 12% last year compared to the previous year's expenses, which saw a surge of 28% in 2022.

The incident serves as a reminder of the volatility inherent in stock markets. The initial spike in Lyft's stock due to the typo was a case of misplaced optimism, swiftly corrected once the error was discovered. Investors must remain vigilant and scrutinize financial reports with caution to avoid falling victim to misleading information.