By Stephen Wilmot
Shared electric scooters are getting booted off the stock market, but don't rule out a comeback.
Bird Global, a pioneer in the business of renting out e-scooters and e-bikes to help city dwellers get around, filed for bankruptcy protection early Wednesday morning. It went public via a merger with a special-purpose acquisition company in late 2021 at an agreed valuation of $2.3 billion. The stock immediately went into terminal decline as investors tired of startups without a clear path to profitability.
The past half year has been especially rocky. Founder Travis VanderZanden, a former executive at Lyft and Uber, resigned in June. The shares were delisted by the New York Stock Exchange in September for failing to maintain a market value above $15 million for 30 consecutive days, even as the company announced the acquisition of a smaller competitor. In November it reported widening losses for the third quarter. It will continue to operate while it restructures its balance sheet in bankruptcy court.
Bird isn't the only so-called micromobility player in trouble in a world of higher interest rates. Micromobility.com, previously called Helbiz, said Tuesday that it had been asked by Nasdaq to delist its shares because they were trading below $1, among other violations of its rules. It also went public via a SPAC deal in 2021. Europe's largest micromobility business, privately-owned Tier, said last month that it was cutting 22% of its staff after what it called a "difficult year."
Electric scooter rentals are unpopular with a lot of citizens, who often see them as a dangerous nuisance, as well as investors. Nearly 90% of voters in a Paris referendum supported a ban, which took effect in September, though the Parisian capital is encouraging shared e-bike programs. New York City, which only legalized privately-owned electric scooters in 2020, has so far limited shared fleets to a pilot program in the Bronx.
Yet it would be hasty to conclude that the micromobility sector has run out of road. Lime, Bird's big U.S. peer, appears to be doing better. It made $27 million in earnings before interest, taxes, depreciation and amortization and various adjustments in the first half, after a 45% increase in gross bookings.
Achieving profitability at the all-important cash-flow level while maintaining growth will be harder, as building and maintaining fleets of rugged electric bikes and scooters is a capital-intensive business. Still, based on the limited financial data it has disclosed, Lime seems to be in a better position than its listed peers. It also hasn't announced layoffs since 2020, when the pandemic put shared-mobility businesses on ice. It should benefit from the financial dysfunction of rivals.
Lime wisely never followed its peers down the SPAC route, which was most attractive to companies that wanted or needed cash quickly. It has long teased the prospect of an initial public offering. The shared micromobility sector has yet to prove to skeptical investors that it has a sustainable business model. With Lime, it could have a better shot.
Write to Stephen Wilmot at stephen.wilmot@wsj.com
(END) Dow Jones Newswires
December 20, 2023 10:36 ET (15:36 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
Comments