Bird, one of the first and most popular electric scooter companies. is on the verge of bankruptcy. This is what the management of the company itself commented on, which seeks to reduce non-strategic or minority markets so as not to get into the closure of the entire company. As if that wasn’t enough it is also known that the reports provided by the company between 2020 and 2022 are incorrect.. And besides, the tech company knew about it. Byrd would add unpaid customer trips to the income statement. Amounts that, in fact, never became part of their accounts.
Byrd’s crisis, according to his directive, points to “factors out of control” companies. Market volatility, lack of funding are part of your list. In addition, an economic crisis that persists amidst severe uncertainty could be fatal for an electric scooter company. So much so that if this continues, Bird may not be able to fulfill its obligations next year.. That may push the technology to search for resources to carry out official bankruptcy in all regions. At least, if he fails to raise $38.5 million in cash flow, which he promises only until December of this year.
This is not the first time that Bird has faced serious solvency problems. All of 2022 has been a challenge for electric scooter technology. Already in the middle of the year they collided 23% reduction in workforce and change of direction. The second quarter results showed a $310.4 million loss but only $76.7 million in revenue; making, however, more trips than in previous quarters.
This directly affected its market value. Trading through SPAC since 2021 with a $2.3 million valuation. IPO for the scooter manufacturer was not easy. The poor results even pointed to a warning from the Nasdaq that the price was too low. Danger for the current stock market.
The problem of false positives has become the icing on the cake, which is starting to get more complicated for Byrd. The company itself has indicated that it has exaggerated its own accounts in the latest results. In fact, after this announcement, the presentation of the third quarter was postponed. The analytics teams that worked on these accounts, those who found inflated resultsYes, they are now faced with the task of redoing all accounting in order to exclude those business trips that are not reflected in the income statement.
The bird will say goodbye to all markets or just some
Germany, Sweden, Norway and dozens of US regions said goodbye to Byrd in the middle of this year. They won’t be the last, far from it. Unless the electric scooter company goes bankrupt, it will also be forced to reduce its presence in markets that still exist. Portugal, the UK, France, the US and several regions of Spain will be on the list of candidates to soon lose Byrd’s presence.
In fact, Madrid may be the first to carry out the sentence. Present since the beginning of the electric scooter fashion, Bird is now facing a third round of operating licenses in Madrid. Unlike the previous ones, when almost 20 subjects divided the territory among themselves, this time only 3 will be selected to work in the capital.
The presentation period, which ended a few days ago and the result of which will be known in early 2023, may take into account the situation with Byrd’s solvency. Left, for the first time in more than 5 years, without participation in the capital. And, quite possibly, in the rest of the regions, since Byrd has not won one of the most selective electric scooter sharing contests in the country to date.
Source: Hiper Textual
