Micro-mobility company Bird’s share price fell 10.8%, or about two cents, in after-hours trading called it would perform a reverse stock split. The move is Bird’s attempt to readjust to the New York Stock Exchange after the company received a delisting notice for being underpriced.
The news comes a week after Bird reported poor first-quarter results, in which the company saw a decline in both revenue and ridership. While Bird was able to cut costs, it wasn’t enough to convince investors that the scooter company could be profitable.
The NYSE first issued a delisting announcement for Bird last June after the company’s share price traded below $1 for 30 consecutive trading days. Despite a series of cost-cutting measures — including business unit closures, employee layoffs, executive reshuffles, and exiting dozens of unprofitable markets — Bird failed to bring its stock price back into compliance.
“We heard the message from our shareholders very clearly: A reverse split expands our ability to attract investors while we remain focused on our goal of being a cash-generating company by 2023,” Bird CEO Shane Torchiana said in a statement .
In a March interview, Torchiana told TechCrunch that a reverse split is not on the cards in the short term, as Bird has until September to get back into compliance and he’s confident markets would react rationally to the changes Bird made better . The executive has not yet responded to a request for comment and also explained why the company changed course.
Bird’s shares closed at $0.11 on Thursday. When markets open on Friday, Bird will begin trading on a split-adjusted basis of 1/25.
As of May 1, there were approximately 286.8 million Class A common shares and 34.5 million Class X common shares. Post the reverse stock split, Bird will have approximately 11.5 million Class A shares and approximately 1.4 million Class X shares X dispose.
Micromobility.com, formerly known as Helbiz, is the only other publicly traded shared micromobility company. In late March, the company also executed a 1/50 reverse stock split to also return to the Nasdaq’s $1 floor bid. At that time, the company was also renamed Micromobility.com.
On March 30, Helbiz stock 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, down nearly 85% in less than two months.
Hopefully, for Birds sake, Micromobility.com’s failure isn’t indicative of how its stock will perform after this reverse stock split.