Helbiz Wheels acquisition fails to impress investors • TechCrunch

Helbiz’s deal to buy Wheels is officially complete, and with it some promises from the micromobility common operator to its investors that the bundle will double its annual revenue and help it reach profitability.

Helbiz is hardly the only micromobility shared operator struggling to achieve profitability. Today, most companies in this volatile industry are in this situation. Helbiz may have a tougher road ahead. The company faced a delisting from Nasdaq to trade well below the minimum of $1.00 per share. Bird, the only other public micromobility company, is facing similar risk of delisting.

Helbiz appears to be using the Wheels acquisition as a lifeline.

Still, Wall Street — at least based on Helbiz’s stock price — isn’t impressed with the company’s promise to generate “more than $25 million in full-year 2022 revenue,” tap into Wheels’ user base of 5 million riders, and expand into new markets like Los – Angeles.

Investors seem to be taking a negative view of this. Shares of Helbiz fell 8.10% to close at $0.28 on Tuesday. The share price has fallen by about 65% since then. initially announced the acquisition. But that drop is nothing compared to the free fall that has occurred since its August 2021 debut at $10.20. To regain Nasdaq compliance, Helbiz must find a way to increase its stock price by 257% for at least 10 consecutive trading days by January 16, 2023.

Why haven’t investors caught on? Perhaps it is a matter of decreasing cash reserves of the company The company’s second quarter earnings reportits ambitious positive gross profit target or its restructuring plans.

Helbiz CFO Giulio Profumo said the combined company expects to achieve a positive gross profit margin within the next nine months and achieve profitability at the operating level within the next 24 months. Helbiz appears to be counting on restructuring to help it achieve that goal.

“We intend to restructure the combined company to accelerate our path to profitability through a combination of higher profitability from the Wheels business, operational savings from layoffs at both companies and lower cost of revenues,” Profumo said.

We’ve seen this kind of language before — Byrd has made similar comments before dismissal 23% his employees and exit from dozens of markets around the world, as he did Level before firing 10% workforce Spin.

Around the time Helbiz signed its intent to acquire Wheels, Wheels laid off several employees. The company has since fired many of those employees, according to one source familiar with the matter, but a Helbiz representative told TechCrunch that some of the fired Wheels employees have been brought back. He also informed that nothing is planned yet in terms of layoffs.

“There are gaps that each company fills with each other, and we will use that to drive efficiencies and cost savings,” said Matt Rosenberg, Helbiz’s head of North American communications.