Zebeth Media Solutions

micromobility

Bird tells SEC it overstated revenue for two years • ZebethMedia

Micromobility company Bird said Monday it had overstated its revenue for more than two years by recognizing unpaid customer rides. Bird’s audit committee found on Friday that the company’s financial reports spanning the first quarter of 2020 through the second quarter of 2022 “should no longer be relied upon,” according to a U.S. Securities and Exchange Commission (SEC) filing. The committee discovered the discrepancy while preparing Bird’s financial statements for the quarter ended September 30, 2022. The Santa Monica–based e-scooter and e-bike sharing company also said it will delay filing its third-quarter financial report, originally scheduled for Monday. Bird said it had recorded revenue on certain trips even when customers lacked sufficient “preloaded ‘wallet’ balances.” The company said it should have reported the unpaid balances on its financial statements as deferred revenue. An internal investigation found that the company’s “disclosure controls and procedures are not effective at a reasonable assurance level.” Bird, which went public in a November 2021 SPAC deal that valued the company around $2.3 billion, said it plans to file its third quarter results as soon as possible and restate its previous financial results. In August, Bird reported that it missed Q2 revenue estimates slightly, with a net loss of $310.4 million on revenue of $76.7 million. It said that its total number of rides doubled over the year-ago period but that its average fare and number of rides per vehicle dropped. Overall, the company suffered a tumultuous second quarter, announcing plans to dismantle its retail business, shut down operations in unprofitable markets and laying off close to 140 workers. CEO Travis VanderZanden stepped down as president in June, shortly after the New York Stock Exchange warned that the company could be delisted for trading below $1. Bird said during its second-quarter financial report that it would realize savings from the cost-cutting measures in the third quarter.

Bird exits Germany, Sweden, Norway and “several dozen” US, EMEA markets • ZebethMedia

Shared micromobility company Bird is exiting several markets across the world as it struggles to build an economically viable business, according to a regulatory filing. Bird said it will “fully exit Germany, Sweden and Norway, as well as wind down operations in “several dozen additional, primarily small to mid-sized markets” across the U.S., Europe, the Middle East and Africa, according to the company. Bird would not respond to requests for more information from ZebethMedia, so it’s not clear which cities Bird will exit. However, the only Middle Eastern market Bird is in is Israel, and Bird doesn’t appear to be in any African countries. The downsizing of the business comes a few months after Bird laid off 23% of its staff in an attempt to become more financially self-sustainable and achieve profitability. More importantly, Bird really needs to raise its share price before it gets delisted by the New York Stock Exchange. In June, Bird got a warning from the NYSE for trading too low. The company was given six months to get back to compliance, which means holding an average share price of at least $1 across 30 consecutive trading days and having a share value above $1 on the final trading day of that month. At the time, Bird was trading at $0.56. Today, Bird is trading at $0.37 after hours, which, to be fair, is up 1.01%. In a blog post, Bird blamed a lot of the bumps on the road to profitability to cities that lack a “robust regulatory framework.” The company said it reviewed its portfolio of cities to weed out the ones without such a framework — the cities that have too much competition, an oversupply of vehicles and overcrowded streets. “In the short-term the current macroeconomic conditions have created an environment that requires us to increase our level of financial discipline and make a clear distinction between markets where we see a near-term path to fully self-sustainable operations, and those which appear to be longer-term, riskier investments,” Bird wrote.  It’s not clear what this will mean for Bird’s army of fleet managers who will be affected by the change, and Bird did not respond in time to ZebethMedia’s request for comment. Bird’s fleet managers are essentially contractors that pay up-front fees to manage fleets of scooters for Bird. They essentially pay to rent the scooters from Bird so they can deploy them and earn an income, but they are responsible for maintenance, storage, and maintaining adequate insurance coverage. The program has been criticized for potentially luring inexperienced contract workers into debt for scooters they’ll never own.

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