Helbiz (NASDAQ:HLBZ), which rents and makes e-bikes and scooters, will undergo a 50-to-1 reverse stock split. Furthermore, it will change its name to Micromobility Inc., with the ticker symbol MCOM.
Shares fell 4.5% on the news and another 7% overnight. The stock was due to open on March 31 at about 10 cents per share, representing a market capitalization of about $35 million. The reverse split will take the stock price to about $5 per share but will have no impact on the market cap.
What to Know About HLBZ Stock
Helbiz warned in February that a reverse split would be necessary if its stock price didn’t get over $1 per share by the end of March. At the time of the warning, the shares were trading at 24 cents.
Helbiz offers an app for renting e-bikes and recently bought Wheel Labs, which makes electric scooters.
E-bike and scooter rentals were popular in the last decade when Uber (NASDAQ:UBER) and other companies filled urban streets with them. The scooters could be rented by tapping a credit card and had GPS receivers so they could be picked up in the evening.
But cities complained of the mess, scooters and rides were stolen, and the business dried up. Helbiz sought to rebuild it around college campuses and towns with a custom app. But it consistently lost more money than it took in.
Over the first nine months of 2022, the company lost $65 million on revenue of just $11.5 million. Operating cash flow was a loss of $34.5 million. There was just $3.5 million in cash on the books at the end of September.
Helbiz underwent a short squeeze in January, which took the stock price to a high of 42 cents per share.
In announcing the name change, the company said investors should anticipate more merger activity. It also said it will open a store to sell Wheels scooters in the New York City neighborhood of Soho within 60 days.
What Happens Next?
It’s hard to see what Micromobility can do with $3.5 million in cash and a market cap of $35 million. But it’s clear from recent share purchases that management believes in the company.
Maybe someone else will, too.
On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. His 10th novel is The Time Tunnel, now available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.
