Shares of Proterra (NASDAQ:PTRA) are up by about 20% today. This comes as the electric bus maker announced that it has voluntarily filed for Chapter 11 bankruptcy protection. Proterra noted that the bankruptcy filing is intended to “maximize the value of its business and enhance the potential of each of its product lines.” The company seeks to separate its three business units and is open to selling off one or more of the units.
Meanwhile, Proterra has stated that the business will operate as usual. It plans on filing a motion with the bankruptcy court to use its capital toward normal business operations and paying employees, vendors and suppliers.
“The foundation we have built has set the stage for decarbonization across the commercial vehicle industry as a whole, and we recognize the great potential in all of our product offerings to enable this important transformation,” said CEO Gareth Joyce. “This is why we are taking action to separate each product line through the Chapter 11 reorganization process to maximize their independent potential.”
PTRA Stock: Proterra Files for Chapter 11 Bankruptcy Protection
As a result of the bankruptcy filing, Proterra cancelled its second-quarter earnings conference call on Aug. 9. During the quarter, revenue increased to $85.71 million compared to $74.56 million a year ago. On top of that, the company reported a net loss of $30.99 million, improving from a net loss of $41.82 million year-over-year (YOY). These numbers may appear satisfactory, but some other metrics warrant a second look.
Proterra’s loss from operations rose to $62.87 million compared to $46.05 million. Meanwhile, its gross profit was a loss of $12.38 million compared to a gain of $555,000 in the prior year quarter. Product cost of goods sold also ballooned to $92.39 million from $69.1 million. This marked an increase much greater than revenue growth.
On Aug. 7, Nasdaq provided Proterra with written notice that its stock would be suspended at the opening of business on Aug. 17. On that day, shares of PTRA are expected to begin trading on the over-the-counter (OTC) market. They will also have a new ticker, PTRAQ. Proterra has stated that it will not appeal Nasdaq’s delisting determination.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
