Helbiz (HLBZ) Stock Gains 9% After Regaining Nasdaq Listing Compliance
After suffering huge losses in the market, micromobility specialist Helbiz (NASDAQ:HLBZ) received a respite, with shares jumping 9% higher in the afternoon session. Catapulting HLBZ stock was the Nasdaq exchange, which informed Helbiz that it …
After suffering huge losses in the market, micromobility specialist Helbiz (NASDAQ:HLBZ) received a respite, with shares jumping 9% higher in the afternoon session. Catapulting HLBZ stock was the Nasdaq exchange, which informed Helbiz that it regained compliance with listing standards. Nevertheless, the beleaguered enterprise still has a long road to credibility.
According to an accompanying press release, Nasdaq sent a written notice to Helbiz in June 2022 that it did not comply with Nasdaq’s listing requirements. Specifically, Helbiz’s Class A common stock and its publicly traded warrants must exceed a value of $35 million or more for 10 consecutive business days.
Later, in February 2023, Helbiz discussed this matter with the Nasdaq Hearing Panel. Still, at the time, the exchange operator required Helbiz to come into compliance. Subsequently, on March 7, the micromobility firm received a letter from Nasdaq stating that it regained compliance.
“We are pleased to have regained compliance with Nasdaq’s market value of listed securities requirement,” said Helbiz CEO Salvatore Palella. “This is an important step for the Company, and we will continue to work hard to meet all of Nasdaq’s listing requirements.”
Huge Challenges Ahead for HLBZ Stock
With the latest move higher for HLBZ stock, this price action brings its year-to-date performance to around 18%. So far, so good. However, in the trailing six months, shares cratered 77%. And in the trailing one-year period, HLBZ hemorrhaged a devastating 95% of equity value.
Unfortunately, then, the midweek session boost represents a drop in the bucket regarding the restoration of credibility. For HLBZ stock to become truly viable, it must tackle myriad obstacles. Primarily, its financial picture presents grave concerns. Perhaps most notably, the company’s Altman Z-Score sits at 19.32 points below parity, indicating severe distress. As well, this metric signals higher-than-normal bankruptcy risk in the next two years.
In addition, its revenue trend is miniscule compared to the losses that the company incurs. For instance, in its third quarter of 2022, Helbiz posted $3.67 million in sales, down 22% against the year-ago period. Just as bad, the company suffered an operating loss of $12.5 million and a net loss of $24.6 million.
Until Helbiz substantively addresses the fiscal viability component of its business, HLBZ stock will likely remain a speculative venture.
If that wasn’t enough, the industry itself struggles badly. Per SmartCities Dive, David King, associate professor of urban planning at Arizona State University, declared that “[t]he era of free or cheap money — is probably at an end.”
Consequently, the professor believes companies will prioritize profitability and shrink their footprints. Unfortunately, Helbiz’s footprint is already shrinking but with huge losses. Therefore, HLBZ stock carries even greater risks.
Why It Matters
Even Helbiz’s management team recognizes the massive mountain to climb for HLBZ stock. According to TipRanks, from Q3 2020 to Q3 2021, the company disclosed (through its various mandatory filings) 60 risk factors. However, in Q4 2021, Helbiz (via its Form 10-K) revealed 72 risk factors. Therefore, prospective investors should exercise extreme caution with HLBZ.
On the date of publication, Josh Enomoto did not have (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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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