Just hours after Bird said it had overstated revenue for more than two years by acknowledging unpaid customer rides, Bird issued a warning of growing concern. In a regulatory filing, the company said it may “need to scale back or discontinue some or all of its operations to reduce costs or seek bankruptcy protection.”
Bird closed the third quarter with $38.5 million in free cash flow. Without additional financing, the company said it would not be able to meet its obligations over the next year. Bird points to “factors outside of its control” such as current market volatility that could affect whether and how Bird receives more equity or debt financing.
“Accordingly, the Company plans to continue to closely monitor its operating outlook, reduce its operating expenses, and seek additional sources of external capital,” the filing read. “Along with this realignment of the global footprint, the Company is targeting additional reductions in its operating expenses.”
Bird has been struggling since it went public via a special purpose acquisition merger in 2021. The dramas for the young company have only increased in recent months. Since May, Bird has dismantled its retail business, laid off 23% of staff, received a warning from the New York Stock Exchange for trading too low, and exited Germany, Sweden, Norway and “several dozen” markets in the US. In addition, Bird CEO Travis VanderZanden stepped down as president and then chief executive officer, succeeded in both roles by Shane Torchiana.
Bird is not the only SPAC this year to issue a warning of growing concern. Canoo and Arrival also said they may not have enough funds to bring their electric vehicles to market, and Arrival also recently received a delisting warning from the Nasdaq.
Bird shares tumbled nearly 16% today and are currently trading at $0.36. The company has until next month to push its share price above $1.00 per its warning from the New York Stock Exchange.
Bird’s Third Quarter Financial Statements
In the third quarter, Bird said its revenue rose 19% to $72.9 million, compared with $61.1 million in the same quarter last year. Bird shared his income increase the same day he revealed that he overstated income in the past and that the financial statements for the past two years “should no longer be reliable.”
Bird had been counting preloaded wallet balances in its overall income and is now in the process of looking at balances it doesn’t expect to redeem in the future, according to Ben Lu, Bird’s chief financial officer. Lu said that Bird would finish this audit by the fourth quarter.
“Upon completion, we expect to record continued breakage revenue and anticipate booking an upgrade that would increase our revenue next quarter,” Lu said in a statement. “As a result of these two accounting adjustments, we are retiring our prior fiscal 2022 revenue guidance of $275 million to $325 million.”
Lu did not explain how Bird would balance out the exaggerated revenue from the past, nor whether Bird would issue a new revenue guidance for the full year.
Bird closed the quarter with a net loss of $9.8 million, compared with a net loss of $42.1 million in the prior year, suggesting that the company’s many cost cuts had an impact. In fact, Bird’s third-quarter operating expenses were $29.4 million, which is a decrease of $10.6 million from the third quarter of 2021. Without additional funds, however, Bird may be exiting more than several dozen markets.