Bird Stocks Drop 11% on Reverse Stock Split News

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Shared micromobility company Bird’s share price fell 10.8%, or about two cents, in after-hours trading after the company saying would issue a reverse stock split. The move is Bird’s attempt to return to 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 registered a decrease in both revenue and the number of passengers. Bird was able to cut costs, but it wasn’t enough to convince investors that the scooter company could make a profit.

The NYSE first issued a delisting notice for Bird last June after its share price traded below $1 for a period of 30 consecutive trading days. Despite a number of cost-cutting measures, including drop in business lines, lay off staff, executive restructuring and leaving dozens of unprofitable markets — Bird has been unable to bring its share price back into compliance territory.

“We have heard the message very clearly from our shareholders, a reverse split broadens our opportunities to attract investors while staying focused on our goal of generating cash as a business by 2023,” Shane Torchiana, Bird’s CEO, said in a statement.

In an interview in March, Torchiana told TechCrunch that a reverse split was not on the horizon any time soon because Bird had until September to return to compliance and he was confident that the markets would react rationally to the changes Bird was making for the better. . The executive has not yet responded to a request for comment, including why the company changed course.

Bird’s shares closed Thursday at $0.11. When the markets open on Friday, Bird will begin trading with an adjusted split of 1/25.

As of May 1, there were about 286.8 million Class A common shares and 34.5 million Class X common shares. After the reverse stock split, Bird will have about 11.5 million Class A shares and around 1.4 million Class X shares.

Micromobility.com, formerly known as Helbiz, is the only other publicly traded micromobility sharing company. At the end of March, the company also conducted a reverse stock split at a 1/50 ratio as an attempt to re-comply with the Nasdaq’s $1 minimum price offer. It was also around this time that the company changed its name to Micromobility.com.

On March 30, Helbiz shares closed at $0.12. When it opened the next day under the new ticker “MCOM,” it was trading at $3.66.

On Thursday, MCOM closed at $0.55, a drop of nearly 85% in a span of less than two months.

Hopefully, for Bird’s sake, the failure of Micromobility.com is not an indicator of how its own stock will perform after this reverse stock split.