The scooter startup’s accounting blunders are about more than its bottom line
Well, those Bird results were wrong.
It recently came to light that Bird, a former startup unicorn in the once-hot scooter rental market, overstated its revenue for several years, leading to the company stating in a filing with the U.S. Securities and Exchange Commission that several of its “audited consolidated financial statements [ … ] should no longer be relied upon.”
The errors impact the company’s results for 2020 and 2021, along with the first two quarters of 2022. Given that Bird announced its plan to go public by merging with a special purpose acquisition company in mid-2021, a transaction predicated on its trailing results, the accounting mess is consequential.
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For many investors, we reckon that the admission of error is a bit too late. Back when the Bird-SPAC deal was voted on, shares of the blank-check company fell. And then kept falling. Since the merger of the two companies, Bird has lost nearly all of its value, falling from a 52-week high of $9.05 per share to just 30 cents per share as of early morning trading today, according to Google Finance data.
More simply, Bird lost nearly all of its value after going public, which we presume means that some regular folks took a bath. Now it turns out that it went public using partially incorrect historical data. Even more, the company’s latest earnings report notes that as of the end of Q3 2022, Bird “will not be sufficient to meet the Company’s obligations within the next twelve months” with its existing cash balance of $38.5 million.