Micromobility (NASDAQ:MCOM), formerly known as Helbiz, saw MCOM stock rise after exiting the streaming business to focus on what it called “core competencies.”
The company held a contract to stream matches from Italy’s Serie B soccer league for two years. Ending the contracts will let it focus on the sale and rental of e-bikes, scooters and accessories. The move is expected to save $14 million.
Micromobility was trading on June 29 at 12.5 cents per share, up almost 10%. The company’s market cap is about $5 million.
MCOM Stock: The Business Behind It
Micromobility hasn’t traded over $1 per share since early May, even after executing a 1:50 reverse stock split in March and changing its name.
The company has been generating almost no revenue as it tries to sell an e-bike called the WheelsOne, a scooter called Helbiz and an app that lets companies, universities or municipalities rent and control the devices.
E-bikes and scooters were popular enough in the last decade to bring Uber (NASDAQ:UBER) and others into the rental business. But the efforts soon ran afoul of local governments that saw unused scooters as litter. The business was also not profitable.
Helbiz was able to join the Nasdaq through a special purpose acquisition company (SPAC) called Greenvision Acquisition in 2021. This delivered $80 million in proceeds, valuing the company at $408 million.
Micromobility management said the company lost $19.5 million in the first quarter, $3.53 per share, on revenue of $3.92 million. At the end of March it had $957 million in cash.
What Happens Now?
Not every great business idea turns into a great business.
Scooters and e-bikes are selling well and have become a fixture on many streets. But renting them, even using GPS to collect them each night and with tapped credit cards to pay for them, has not worked. The likelihood of Micromobility surviving until the end of the year without a capital infusion or new ideas is minimal.
As of this writing, Dana Blankenhorn 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.
