Bird files for bankruptcy after a challenging year. The electric scooter manufacturer, Bird, has concluded the year by declaring Chapter 11 bankruptcy. Bird announced in a news release today that it had begun a “financial restructuring process aimed at strengthening its balance sheet,” adding that it will be carrying on with its regular business operations in order to achieve “long-term, sustainable growth.”
Founded in 2017 by Travis VanderZanden, a former executive at Lyft and Uber, Bird is one of many firms that have introduced dockless micro-mobility platforms globally, enabling city dwellers to pay for momentary access to electric bikes or scooters. The company went public through a SPAC merger in late 2021, but its shares fell precipitously in a crowded market with unclear economic foundations. Twelve months later, its market valuation had dropped from almost $2 billion at the time of its NYSE debut to a mere $70 million. The NYSE warned that Bird’s share price was too low as a result of this decrease.
Things didn’t get better, and as the business’s share price kept falling, CEO VanderZanden left in June, and the company was eventually taken off the NYSE in September. Bird also made an announcement about a round of layoffs immediately after spending $19 million to acquire its rival Spin.
With the help of current lenders, including Apollo Global Management division MidCap Financial, which is providing $25 million in financing through the bankruptcy processes, Bird will be able to restructure its financials through Chapter 11 bankruptcy without affecting its daily operations.
Through the use of a “stalking horse” agreement that will essentially start an auction, Bird hopes to sell off its assets for the best potential price. Over the next two months, its present lenders will select a baseline bid and then open the proceedings to other bidders.
According to the corporation, Bird’s activities in Canada and Europe would “continue to operate as normal” and are not included in this bankruptcy petition. While Paris has explicitly banned the use of e-scooters and Madrid and other cities have clamped down on the industry, some e-scooter businesses are undoubtedly feeling the pinch of European rules.
Recently, the stock of rival company Micromobility was removed from the Nasdaq three years after it went public through a SPAC merger. Also, 22% of Tier’s employees were let go.
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