Dear HLBZ Stock Fans, Get Ready for (MCOM) Stock

  • Helbiz (HLBZ) is opting for a reverse stock split and changing its name.
  • It will now be known as (MCOM).
  • But even these measures won’t solve the company’s fundamental problems.
HLBZ stock - Dear HLBZ Stock Fans, Get Ready for (MCOM) Stock

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For months, investors have been watching Helbiz (NASDAQ:HLBZ) stock trend gradually downward. Apart from its massive surge driven by short-selling attention in January 2023, the micromobility company has been in a race to the bottom all year.

In July 2022, Nasdaq issued a delisting notice, warning Helbiz it had 180 days to reach the price point that would put it back in compliance with the exchange. While the company ultimately accomplished this, it hasn’t been an easy road to recovery.

Today, Helbiz announced several major steps toward rehabilitating its image. It will be rebranding itself as (NASDAQ:MCOM) and will undergo a reverse stock split at a 50:1 ratio. Investors won’t be able to trade HLBZ, but they are able to trade MCOM stock as of today.

HLBZ Stock Is Now MCOM Stock

Since it began trading a few hours ago, MCOM stock has been highly volatile. As of this writing, it is down more than 37% and shows no signs of a rebound. That is commonplace when a company undergoes such a radical transformation. However, in this case, it may be more to do with the fact that Micromobility likely isn’t seen as a stable investment. Let’s take a closer look at the company formerly known as Helbiz.

Firstly, a reverse stock split generally is generally considered a sign of instability. It is a common tactic for companies seeking to avoid being delisted, generally employed as a last resort. Some investors are likely to regard it as an attempt to artificially inflate shares after a stock has hit rock bottom. Additionally, there’s always the possibility that a reverse split will negatively impact a stock’s liquidity, as it reduces the amount of shares in the open market. It doesn’t bode well for MCOM stock that is opting for a reverse stock split so soon after it began trading.

Secondly, it’s important to note that changing its name won’t fix the company’s underlying problems. TechCrunch recently assessed the company’s decision, raising some important points to which did not respond. Per the outlet:

“Top of mind questions include: How is the company paying for even one brick-and-mortar store with the meager cash it had in the bank at the end of 2022? When does the company think it’ll be back in compliance with the Nasdaq in regards to stock price? Have they addressed the other Nasdaq delisting warning about failure to have an audit committee of at least three independent directors?”

The fact that the company didn’t provide answers to these pressing questions suggests that it doesn’t have them. But if the rebranded firm wants to attract new investors, it should address the fundamental concerns. Underlying problems won’t go away just because Helbiz now has a different name.

What Comes Next

As of now, it’s unclear how markets will react to the new company in the long run. But just because the company has regained Nasdaq compliance, that does not mean it will keep it.

Investors shouldn’t ignore the fact that still has a troubled history that isn’t disappearing with the Helbiz name or trading symbol. MCOM still will have to prove that it can remain above the $1 mark before even speculative traders are likely to place any major bets on it.

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 Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

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