Bird Faces Delisting from NYSE as Stock Collapses, Shifts to Over-the-Counter Trading
Bird, a provider of electric scooters for city rentals, has announced that the New York Stock Exchange (NYSE) will suspend trading of its stock due to its failure to maintain a market capitalization above $15 million for 30 consecutive days. In a statement, the company revealed that its shares will now be traded on the over-the-counter exchange starting Monday.
Challenges in the Electric Scooter Industry
The electric scooter and bike rental industry experienced significant growth prior to the pandemic, with venture capitalists pouring funds into these ventures despite their lack of profitability. Bird, which raised over $500 million and reached a valuation of $2.5 billion in a 2019 funding round led by Sequoia Capital, faced a major setback when the COVID-19 pandemic hit in 2020, causing cities to go into lockdown.
Financial Struggles and Stock Performance
Although growth resumed in 2021, Bird's financial situation continued to deteriorate. The company went public through a merger with a special purpose acquisition company in the same year, but its net loss increased from $215 million to $359 million in 2022. While revenue saw a 28% increase to $245 million, the stock suffered an 80% loss in value this year, closing at 90 cents on Friday and resulting in a market cap of $11.6 million.
In the midst of these challenges, Bird's founder, Travis VanderZanden, left the company in June. To navigate the difficult market conditions, Bird recently acquired scooter startup Spin for $19 million, including $10 million in cash.
In response to the delisting from NYSE, Michael Washinushi, Bird's interim CEO, expressed confidence in the company's intrinsic value and emphasized its commitment to shareholders, employees, partners, and the cities and institutions it collaborates with.
As Bird transitions to over-the-counter trading, the company faces the task of rebuilding investor confidence and finding new avenues for growth in the competitive electric scooter market. The future success of Bird will depend on its ability to adapt to changing market dynamics and demonstrate sustainable profitability in the long run.
Implications of Bird's NYSE Delisting for New Business Ventures
Bird's recent delisting from the New York Stock Exchange (NYSE) and shift to over-the-counter trading could have implications for new businesses, particularly in the electric scooter industry. This development highlights the challenges of maintaining profitability and investor confidence in a highly competitive and volatile market.
Lessons from the Electric Scooter Industry
The electric scooter industry, which saw significant growth pre-pandemic, faced major setbacks due to the COVID-19 lockdowns. Bird's experience serves as a cautionary tale for new businesses about the risks of rapid expansion and heavy reliance on venture capital without a sustainable profitability model.
Financial Sustainability and Investor Confidence
Despite resuming growth in 2021, Bird's financial struggles and stock performance decline underscore the importance of financial sustainability for new businesses. The company's increasing net losses and decreasing stock value could serve as a warning to new ventures about the potential pitfalls of going public without a solid financial footing.
Bird's acquisition of scooter startup Spin amidst these challenges suggests a strategy of consolidation and expansion to navigate market difficulties. However, new businesses must carefully consider the financial implications and potential risks of such strategies.
As Bird moves to over-the-counter trading and attempts to rebuild investor confidence, new businesses can learn valuable lessons about the importance of demonstrating sustainable profitability and maintaining investor trust. The future success of new ventures in the electric scooter market and beyond will depend on their ability to adapt to changing market dynamics and establish robust financial strategies.
.svg)
