Electric scooter rental provider Bird will be facing a trading suspension on the New York Stock Exchange (NYSE) due to its failure to meet the minimum market capitalization requirement of $15 million for 30 consecutive days. The company’s shares will now trade on the over-the-counter exchange starting Monday.
Before the pandemic hit, electric scooter and bike rentals were becoming popular alternatives to public transit and ride-sharing, attracting significant investments from venture capitalists. Bird, in particular, had a successful funding round in 2019 led by Sequoia Capital, raising over $500 million and valuing the company at $2.5 billion.
However, the onset of Covid-19 severely impacted Bird’s business as cities went into lockdown. Even though growth resumed in 2021, the company’s financial performance continued to deteriorate. Bird went public in 2021 through a merger with a special purpose acquisition company, but its net loss increased to $359 million in 2022 from $215 million the previous year. Revenue also only saw a modest 28% increase to $245 million.
As a result, the stock has lost 80% of its value this year, closing at 90 cents on Friday, resulting in a market capitalization of $11.6 million. In an attempt to boost the stock’s price above $1, a reverse stock split was implemented.
Adding to Bird’s challenges, founder Travis VanderZanden, who previously held executive positions at Lyft and Uber, left the company in June. Despite these setbacks, Bird recently acquired scooter startup Spin for $19 million, including $10 million in cash.
Bird’s interim CEO, Michael Washinushi, remains optimistic about the company’s future. He believes that the current market capitalization does not accurately reflect the company’s value. Washinushi emphasized that the change in listing status on the NYSE will not affect Bird’s commitment to shareholders, employees, partners, and the cities it operates in.
The struggles faced by Bird reflect both the promise and pitfalls of e-scooter ride-sharing. While it initially appeared to be a lucrative market, unexpected challenges, such as the pandemic and increased competition, have made it a more volatile industry to navigate.
Overall, Bird’s transition to the over-the-counter exchange marks a new chapter for the company as it seeks to regain stability and reevaluate its strategies moving forward.
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