© Reuters.
Investing.com – Swvl, a mass transit services company, has been considered one of the hallmarks of fast-growing start-ups, along with its successful listing on the Nasdaq Stock Exchange, especially since the market capitalization of the company surpassed one billion at that time.
But that didn’t last long, as the company lost more than 95% of its stock value, while the company’s market value plummeted to around $ 75 million, having surpassed $ 1.5 billion when it was listed on the UK. Nasdaq Stock Exchange, which currently exposes it to cancellations.
Losses doubled
SWVL had previously predicted that its losses would increase to around $ 90 million this year, from $ 50 million in 2021, before moving into profitability next year, with the support of reduced employment and the interruption of business. some flights suffering losses in Jordan and Kenya, according to the company’s chief financial officer, Youssef Salem.
Salem added, “Part of our plan for the next few months, and in order to become profitable in light of the abrupt market shift, is to focus on the airlines that have the highest uptime and profitability. So we’ve stopped a few. direct lines for passengers in Kenya, Jordan and Alexandria in Egypt, but we have continued with corporate travel, schools and universities, we have also reduced employment by 32%, which will save us 10 million dollars in 2022 and about 100 million dollars in 2023. “
turn to profitability
SWVL expects to increase its revenue to $ 160 million this year, from $ 100 million last year, before increasing to around $ 400 million in 2023, with daily passenger bookings increasing from 300,000 to between 500,000 and 750,000. per day in 2023.
SWVL expects to become profitable in 2023, albeit by a small amount, before reaching around $ 13 million in net profit in 2024, provided it replenishes the profits made in restarting flights that were interrupted this year, providing new jobs.
Swvl operates in approximately 150 cities in 20 countries around the world, including Egypt, Saudi Arabia, Kenya, Pakistan, United Arab Emirates, Jordan and Argentina.
Stock price
SWVL began trading its shares on the Nasdaq Stock Exchange in New York on March 31, following its merger with American “Queens Gambit” last July, with a valuation of $ 1.5 billion, creating a company. called “Swvl Holdings Corp.”, which was listed on the “Nasdaq” at a price of $ 10 per share, before the share price fell from its quotation so far by around 95% to around $ 0.56, bringing the company’s market value of less than $ 75 million.
The company said: “The decline in the stock does not concern management, but we have a responsibility to every shareholder who suffers a loss and we are trying to separate the work plan we are pursuing and the movement of the stock.” He 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 is looking more at the short term and at the rates of return. Valuation methods have completely changed beyond the risk rate, so now we are focusing on the rapid transformation of profitability. “
A number of equity research analysts have issued 3 12-month price targets for Swvl shares. The stock price prediction ranges from $ 1.50 to $ 8.00. On average, they expect the company’s stock price to reach $ 4.83 next year. This indicates a potential increase of 762.9% over the current share price.
layoffs
Earlier this year, SWVL reduced the number of employees by 32% as part of efforts to bring cash flow back to positive within the next year and to try to save on expenses to save the company’s financial situation. , especially in light of the losses witnessed by SWVL escort.
The company said those cuts will 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 to new positions.
Swvl explained that so-called transport-as-a-service and software-as-a-service are “growing rapidly” thanks to recent acquisitions and the company plans to continue growing this business. It also plans to continue investing in the development of its technology pool, which will affect human employment.
Avoid ticking
Some sources have revealed, according to the newspaper Mal, that the company “Swvl” has several options to avoid delisting from the Nasdaq Stock Exchange, in particular “accumulating shares” or “destroying” them with the aim of increasing the market price of the stock. , after its value dropped by about 94% since offering in March 2021.
The sources added that the American Stock Exchange prohibits trading the stock below the $ 1 level for a period of 30 consecutive business days and, if this happens, it will notify the company of the need to change the situation within a period of up to 180 days.
He explained that the stock price of “Swvl” fell to less than $ 1, starting in the September 20 session, when it registered $ 0.94, and continued to fall until the end of last Friday’s session, reaching 0.56, recording 19 consecutive sessions for less than a dollar.
He pointed out that the “pooling of share” option means converting a number of shares into a single stock. For example, if it equals $ 1, the company collects all 10 documents into a share with a value of $ 10.
