© Reuters.
Investing.com – Nasdaq Stock Exchange-listed Egyptian mass transit company Swvl Holdings Corp (NASDAQ :)) has laid off a large number of its employees in the Egypt, Dubai, and Pakistan markets.
This comes in light of the company’s efforts to pivot to profitability and reduce expenses, especially in light of the recent decline in the company’s stock and market value, which has made it subject to delisting from the Nasdaq Stock Exchange.
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layoffs
One of the company’s employees spoke according to the “Al-Sharq” site: “On Sunday they told us that 90% of the team will be fired, including myself, as well as firing a large number of employees working in the Dubai and Pakistan offices .”
However, another employee of the Cairo office said: “90% is an exaggerated rate… I don’t know the exact number, but we had already been informed that we would be fired on Sunday, and I am among those fired, but the exact numbers are only with the company’s management (SWVL), “according to” Al Sharq.
Previously, SWVL cut its headcount by 32% as part of efforts to turn cash flow positive within the next year and seek to save on expenses to save the company’s financial position, especially in light of recent title losses.
The company said those cuts would focus on jobs that have been automated through investments in engineering, product and support functions. It wasn’t immediately clear how many jobs would be affected, but SWVL said it would help some employees move into new positions.
transformation into profitability
The Chief Executive Officer of ‘SWVL’, which specializes in mass transit services, said he was confident that the company will achieve profitability in 2023, with the support of its business in most of the countries where it operates, which it will help remove the ambiguity surrounding Egyptian society.
In a statement to Al-Sharq, on the sidelines of the “Future Investment Initiative” conference held in Riyadh a few weeks ago, Mustafa Kandil, the company’s CEO, explained that “Swvl” is now achieving profitability in 70% of the the countries in which it operates. As it focuses on expanding into the markets of Europe and Latin America; He disclosed that the company is currently studying entry into the US and UK markets and is looking to add financial services to enable it to support its business related work with corporates and governments, including, for example, providing the of paying salaries in advance, he said.
Stock price
“Swvl” began trading on the New York “Nasdaq” stock exchange on March 31, following its merger with the American “Queens Gambit” last July, at a valuation of $1.5 billion, to give life to a company called “Swvl Holding Corp.”
The stock traded on the Nasdaq at $10 a share before the stock price fell about 96% from its current level to about $0.393, bringing the company’s market value to less than $53. Millions of dollars. The stock is now losing nearly 11.6% of its value over the course of two days.
The company said: “The stock decline doesn’t concern management, but we have a responsibility to every shareholder who suffers a loss, and we try to separate the plan of action we’re following and the movement of the stock.” continued: “Last year the investor focused on revenues, the plan for the next few years and the markets in which we operate, but now the investor looks more at the short term and profitability rates. The methods of valuation have completely changed in addition to the risk rate, so now we focus on the rapid transformation of profitability”.
Nasdaq alert
SWVL received its first stock price drop notice from the Nasdaq earlier this month, saying it had 180 days to raise its stock price to avoid being delisted, the company said in a statement. . Therefore, SWVL has until May 1, 2023 to raise its share price above $1 per share for at least 10 consecutive days before receiving official notice of a possible deletion.
The company’s shares have been trading at less than $1 a share since Sept. 20. It is currently trading at about $0.39 a share, a far cry from the $10 level at which the company’s shares began trading on the Nasdaq Stock Exchange last April. Under Nasdaq deletion rules, the index sends an alert to any company whose stock price remains below $1 for 30 consecutive business days. The listed company then has 180 calendar days to raise its share price above the threshold or be delisted.
SWVL is currently considering a reverse stock split, consolidating some of its shares to leave fewer higher-priced shares in the market and/or requesting an extension from the Nasdaq that gives it another 180 days to raise its stock price.
Some sources have confirmed, according to the Maal newspaper, that the company “Swvl” has several options to avoid delisting from the Nasdaq exchange, in particular “sharing securities” or “cancelling them” with the aim of increasing the market price of the security, after its value fell about 96% since the offering in March 2021.
He pointed out that the “stock accumulation” option means converting a number of shares into one stock, for example, if it is equal to $1, the company collects all 10 stocks into one share worth $10.
