A walk around any major city will tell you that micromobility is on the rise, as scooter and bike options that can be rented at the click of a button and left on any sidewalk continue to appear. One of the first companies in this space, Helbiz (NASDAQ:HLBZ) saw some significant gains this month following the news of a streaming partnership with Amazon (NASDAQ:AMZN). HLBZ stock has been declining for the week since, though, and today began with it plunging.
What’s Happening With HLBZ Stock?
As markets opened today, HBLZ stock was quick to fall. As of this writing, it has plunged by 33%.
As steep as this decline may appear, the reason behind the loss may not be as worrisome as you would think. Today began with Helbiz announcing that the U.S. Securities and Exchange Commission has declared its Form S-1 Registration Statement effective as of yesterday.
What It Means
This is essentially a green light for the resale of up to 2.65 million shares of Class A common stock held by PIPE investors. Investors taking the opportunity to offload shares tends to send share prices down, but it doesn’t necessarily mean that the company is in trouble. On the contrary, for Helbiz, this step was necessary for it to complete the requirements necessary to list on the Nasdaq.
“We are excited to have met the initial listing requirements of Nasdaq and continue to believe Helbiz is a category defining and market leading business capable of driving significant shareholder value,” said Helbiz CEO Salvatore Palella in the statement.
The statement also notes that “the Company believes that it has regained compliance with Nasdaq’s initial listing requirements of a $15 million free trading public float and 1 million free trading shares in the public float.” Moving forward, this should be good news for investors who still hold HLBZ stock.
Why It Matters
This type of dip when PIPE investors exercise their option to pull out is common for companies like Helbiz that opted to go public via a SPAC merger. That doesn’t mean, though, that investors should write it off.
Helbiz is a leader in its industry and one that is demonstrating a desire to expand into other areas. Its partnership with Amazon Prime to stream the popular Series B Soccer League matches for which it is the exclusive provider, is a strategic move that sent HLBZ stock skyrocketing. Additionally, it is taking steps to further innovate scooter designs by partnering with Pininfarina (OTCMKTS:PNINF), an Italian car designer.
As other companies in the micromobility space are being acquired, Helbiz is forging ahead. Investors should keep watching.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.