AT A GLANCE
- Bankruptcy Filing: Bird, valued at $2.5 billion, files for Chapter 11 bankruptcy in Florida, citing financial challenges exacerbated by the pandemic.
- Stalking Horse Agreement: The company initiates a “stalking horse” agreement, planning to sell its assets within 90 to 120 days, open to higher bids to maximize stakeholder value.
- Bid Dynamics: Bird’s bankruptcy bid allows room for higher and better offers, emphasizing the goal to maximize value for all stakeholders involved.
- Global Operations: While its U.S. operations face bankruptcy, Canada and Europe offices remain unaffected, continuing normal operations independently.
- Pandemic Impact: Economic troubles began in 2020 for the company during the pandemic, disrupting its environmentally friendly electric scooter service amid lockdowns and reduced mobility.
- Financial Decline: After raising $275 million in 2019, its valuation plummeted in 2020, leading to a decrease in share prices post-merger and subsequent delisting from the NYSE.
- Environmental Contribution: Despite financial challenges, Bird highlights its global impact, with riders covering over 300 million miles, offsetting 90 million pounds of carbon emissions, and contributing to city sustainability goals.
- Share Price Plummet: Bird’s stock, currently traded on the over-the-counter exchange, hits less than $1 per share, marking a significant decrease from its peak valuation.
Bankruptcy Proceedings and “Stalking Horse” Agreement
Electric Scooter company Bird, once valued at $2.5 billion, has officially filed for Chapter 11 bankruptcy protection in a federal court in Florida, according to a company news release.
Bird has entered into a “stalking horse” agreement as part of the bankruptcy process. This arrangement allows the company to facilitate the sale of its assets in the next 90 to 120 days. The bid process is open to higher and better offers, with the primary goal of maximizing value for all stakeholders, as stated by Bird.
Notably, Bird Canada and Bird Europe are not included in the bankruptcy filing and will continue their operations without disruption, as communicated by the company.
Background – Bird’s Economic Challenges
Bird, a Miami-based transportation company renowned for its stylish electric scooters, started encountering economic challenges in 2020 due to the global pandemic, which led to widespread lockdowns. The company had marketed its scooters as an eco-friendly alternative to traditional transportation methods, such as driving or using public transit. Competing with companies like Lime Micromobility, Bird raised over $275 million in 2019, achieving a valuation of $2.5 billion. However, its fortunes dwindled in the subsequent year.
Going Public and Market Struggles
In 2021, Bird went public through a merger with a special purpose acquisition company, but its share price declined. The New York Stock Exchange delisted Bird in September after the company failed to maintain a market capitalization above $15 million for 30 consecutive days.
The company’s shares were subsequently traded on the over-the-counter exchange, where the stock value fell to less than $1 per share as of the latest update.
Environmental Impact and Global Reach
Despite the financial challenges, Bird highlighted its global impact, stating that its riders have covered over 300 million miles globally. This has reportedly offset an estimated 90 million pounds of carbon emissions by avoiding car trips. The company emphasized its contribution to the sustainability goals of numerous cities and its commitment to making alternative transportation convenient, efficient, and enjoyable, according to the news release.
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Source(s): USA Today via AOL
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