Helbiz’s Wheels acquisition fails to impress investors

The deal to buy Wheels has gone through and with it some promises from the shared micro mobility operator to its investors that the tie up will double its annual revenue and help it reach profitability.

Micromobility operators are trying to achieve profitability. Most companies in this volatile industry are currently in this situation. There is a harder road ahead. The company was facing a delisting from the stock exchange because it was trading below the minimum price requirement. Bird is facing a similar delisting risk.

The Wheels acquisition appears to be being used as a rescue fund.

Wall Street isn't impressed with the company's promise to deliver "over $25 million in revenue for the full year of 2022."

There seems to be a negative view among investors. The company's shares fell 8.10% on Tuesday. The acquisition announcement has caused the share price to fall. It has fallen from its opening price of $10.20 to $10.20 in less than two years. A minimum of 10 consecutive trading days prior to January 16, 2023 is needed to regain compliance.

The investors didn't take the bait. It is possible that it is the company's dwindling cash reserves, its ambitious positive gross profit margin target or its restructuring plans.

Within the next nine months, the combined company expects to achieve a positive gross profit margin and profitability. Restructuring is supposed to help it reach that goal.

Profumo said that they intend to restructure the combined company to accelerate their path to profitability by a combination of higher margin from the Wheels business, operational savings from layoffs across both companies, and reductions in the cost of revenue.

Bird made similar comments before it laid off 23% of its staff and exited dozens of markets around the world, as did Tier before it laid off 10% of its workforce.

A few Wheels employees were laid off around the time the intent to acquisition was signed. According to a source familiar with the situation, the company has laid off many of the employees since then, but a spokesman for the company said that some of the employees have been brought back to work. No layoffs have been planned yet, he1-65561-65561-65561-65561-65561-65561-65561-6556 is1-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-65561-6556

The gaps that each company fills in the other will be used to save money.