Shared micromobility company Bird’s share price fell 10.8%, or about two cents, in after-hours trading after the company said it would issue a reverse stock split. The move is Bird’s attempt to get back into compliance with the New York Stock Exchange after it received a delisting notice for trading too low.
The news comes a week after Bird reported poor first-quarter earnings, in which the company recorded a decrease in both revenue and ridership numbers. Bird was able to bring costs down, but it wasn’t enough to convince investors that the scooter company could achieve profitability.
The NYSE first issued Bird a delisting notice last June after its share price was trading below $1 over a period of 30 consecutive trading days. Despite a flurry of cost-cutting measures — including dropping business lines, laying off staff, executive restructuring and leaving dozens of unprofitable markets — Bird has been unable to bring its stock price back into compliance territory.
“We’ve heard the message very clearly from our shareholders, a reverse split expands our opportunities to attract investors as we remain focused on our goal of being cash generative as a business in 2023,” said Shane Torchiana, CEO of Bird, in a statement.
In an interview in March, Torchiana told TechCrunch that a reverse split wasn’t on the near-term horizon because Bird had until September to get back in compliance and he was confident that the markets would react rationally to the changes Bird was making for the better. The executive has yet to respond to a request for comment, including why the company changed course.
Bird’s stock closed Thursday at $0.11. When the markets open Friday, Bird will begin trading on a 1/25 split-adjusted basis.
As of May 1, there were about 286.8 million shares of Class A common stock and 34.5 million shares of Class X common stock. After the reverse stock split, Bird will have about 11.5 million Class A shares and about 1.4 million Class X shares.
Micromobility.com, formerly known as Helbiz, is the only other publicly traded shared micromobility company. In late March, the company also performed a reverse stock split at a 1/50 ratio as an attempt to also get back into compliance with the Nasdaq’s minimum price bid of $1. That’s also when the company rebranded to Micromobility.com.
On March 30, Helbiz’s stock closed at $0.12. When it opened the next day under the new ticker “MCOM” it traded at $3.66.
On Thursday, MCOM closed at $0.55, nearly an 85% drop in a span of less than two months.
Hopefully, for Bird’s sake, Micromobility.com’s failing is not an indicator for how its own stock is going to perform in the aftermath of this reverse stock split.
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