Helbiz’s Wheels acquisition fails to impress investors • TechCrunch
Helbiz’s deal to buy Wheels is formally done, and with it some promises from the small joint mobility operator to its investors that the link will double its annual revenue and help it reach profitability.
Helbiz is hardly the only small joint operating company struggling to achieve profitability. It is a situation that most companies in this volatile industry live in today. Arguably, the Hellby’s path ahead of her is more difficult. The company was facing down a cross off From NASDAQ to trade under $1.00 a share minimum. BIRD, the only other company to trade precision navigation, faces a Similar write-off risks.
Helbiz appears to be using Wheels’ acquisition as a lifeline.
However, Wall Street – at least based on Helbiz’s share price – was unimpressed by the company’s promise to deliver “more than $25 million in revenue for the full year of 2022,” tap into Wheels’ 5 million-rider user base and expand into new markets like Los Angeles. Los Angeles.
Investors seem to be taking a negative view. Shares of Helps Inc fell 8.10 percent on Tuesday to close at $0.28. Since then, the stock price has fallen by about 65%. At first I made the acquisition announcement. But that drop is nothing compared to the free fall it’s seen since its debut in August 2021 at $10.20. In order to restore compliance with the Nasdaq Index, Helbiz has to find a way to increase its share price by 257% for a minimum of 10 consecutive trading days before January 16, 2023.
Why didn’t investors take the bait? Perhaps the company’s dwindling cash reserves, as of Company’s second quarter earnings reportor an ambitious positive profit margin target or restructuring plans.
Giulio Profumo, Helbiz’s chief financial officer, said the combined company expects to generate a positive profit margin over the next nine months and to achieve profitability at the operating level over the next 24 months. Helbiz appears to be counting on the restructuring to help it reach that goal.
“We intend to restructure the combined company to accelerate our path to profitability through a combination of higher margins from the Wheels business, operational savings from redundancy at both companies, and reductions in cost of revenue,” Profumo said.
We’ve seen this kind of language before – Bird has made similar comments before layoffs 23% of its employees and Exit dozens of markets All over the world, as I did Class before layoff 10% of the workforce in Spin.
By the time Helbiz signed off on its intention to acquire Wheels, Wheels had furloughed a handful of employees. The company has since laid off many of those employees, according to a source familiar with the matter, but a Helbiz spokesperson told TechCrunch that some of the furloughed Wheels employees have been reinstated. He also said that nothing has been planned regarding the layoffs yet.
“There are gaps that each company fills in the other and we will use them to achieve efficiencies and cost savings,” said Matt Rosenberg, Head of Communications for North America Helpers.