The electric scooter manufacturer Bird has concluded a challenging year by declaring Chapter 11 bankruptcy. In a news release today, Bird announced that it had begun a “financial restructuring process aimed at strengthening its balance sheet,” adding that it will continue with its regular business operations to achieve “long-term, sustainable growth.”
Founded in 2017 by Travis VanderZanden, a former executive at Lyft and Uber, Bird is one of many firms that have introduced dockless micro-mobility platforms globally, enabling city dwellers to pay for momentary access to electric bikes or scooters. The company went public through a SPAC merger in late 2021, but its shares fell precipitously in a crowded market with dubious economic foundations. Twelve months later, its market valuation had dropped from almost $2 billion at its NYSE debut to a mere $70 million. Due to this decrease, the NYSE warned that Bird’s share price was too low.
Things didn’t get better, and as the business’s share price kept falling, CEO VanderZanden left in June, and the company was eventually taken off the NYSE in September.Bird also announced a round of layoffs immediately after spending $19 million to acquire rival Spin.
Chapter 11: With current lenders, including Apollo Global Management division MidCap Financial, contributing $25 million in financing during the bankruptcy processes, Bird can restructure its financials without affecting its day-to-day operations thanks to a Chapter 11 bankruptcy.
The ultimate objective is to sell Bird’s assets, and a “stalking horse” agreement will start a bidding process aimed at extracting as much value as possible from Bird. Bird’s lenders will establish a starting bid and let other bidders have the first run at things for the next four months.
The announcement states that Michael Washinushi, the interim CEO, will stay in his position before and after the restructure.
“The appointment of new leadership early this year marked the beginning of Bird’s transformation, and this announcement marks a significant milestone in that process,” Washinushi stated. “With this restructuring, we want to right-size our financial structure and expedite our journey toward profitability. We aim to employ micromobility to minimize traffic, car use, and carbon emissions to make cities more livable. We are committed to this goal.
Bird’s operations in Canada and Europe are unaffected by this bankruptcy case and will “continue to operate as normal,” according to the business.
This most recent information was released just one day after rival Micromobility.com, which went public three years earlier through a SPAC merger, was delisted from the Nasdaq due to its plummeting stock price. Additionally, in Europe, dockless scooter startup Tier recently announced the layoff of 22% of its staff in response to the bankruptcy filing of Dutch e-bike startup VanMoof.
In summary, the year could have been better for the field of micromobility. Bankruptcy proceedings may result in reorganization, restructuring debts, or potentially closing down, contingent on the company’s circumstances and choices. I suggest referring to the most recent news or financial reports regarding Bird’s situation to stay current with any recent developments or alterations. Company finances can change so that the outcome might have progressed since the last update.
