Transportation company Bird, which was once valued at $2.5 billion, has filed for Chapter 11 bankruptcy protection in a federal court in Florida, according to a news release issued by the company. The move is part of a strategic “stalking horse” agreement, allowing Bird to use the bankruptcy proceedings to facilitate the sale of its assets within the next 90 to 120 days.
Under this arrangement, the bid for the company’s assets is open to higher and better offers, with the primary aim of maximizing value for all stakeholders involved, as stated by Bird in its official communication. This marks a significant development for the company, known for its popular electric scooters that have become a common sight in many urban areas.
However, it’s important to note that Bird Canada and Bird Europe are not included in the bankruptcy filing and will continue their operations as usual, as highlighted by the company.
The troubles for Bird began to escalate in 2020 when the COVID-19 pandemic led to lockdowns and a decrease in demand for its services. The electric scooters, initially promoted as an environmentally friendly alternative for commuting, faced challenges as people restricted their movement and preferred other modes of transportation or stayed at home.
Founded in 2017 and headquartered in Miami, Bird had previously enjoyed a valuation of $2.5 billion after raising over $275 million in 2019. However, the economic downturn in 2020 and subsequent events in 2021 led to a decline in its valuation. In an attempt to navigate these challenges, Bird went public in 2021 through a merger with a special purpose acquisition company (SPAC). Unfortunately, the company’s share price continued to decrease, and in September of the same year, the New York Stock Exchange delisted Bird for failing to meet the necessary market capitalization requirements.
Following the delisting, Bird’s shares began trading on the over-the-counter exchange, where its stock price plummeted to less than $1 per share as of the recent developments.
Despite the financial setbacks, Bird emphasized its positive impact on the environment in its news release. The company claimed that Bird riders globally have covered over 300 million miles, contributing to the avoidance of an estimated 90 million pounds of carbon emissions from car trips. Bird also emphasized its role in supporting the sustainability goals of numerous cities by providing a convenient, efficient, and enjoyable alternative transportation option.
As Bird undertakes the Chapter 11 bankruptcy proceedings, it remains to be seen how the sale of its assets will unfold and what the future holds for the once high-flying electric scooter company. The outcome will likely have implications not only for Bird but also for the broader micro-mobility industry, shedding light on the challenges and opportunities faced by companies in this evolving space.