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What’s going on with SWVL stock today?


SWVL holdings (NASDAQ:SWVL), a Dubai-based transit software company, jumped 50% on Stocktwits speculation that the company could survive. SWVL stock closed at 10 cents per share on Dec. 21 and was trading close to 15 cents pre-market on Dec. 22.

SWVL went public in April through a special purpose acquisition company (SPAC) at $10 per share. The company has since made several layoffs, trying to become cash flow positive. More recently, it laid off half of its 900 employees in November.

The history of SWVL shares

SWVL was launched in Egypt in 2017 before moving to Dubai. It offers shared van or bus rides via an app, mostly in developing countries. Think of it as similar to Uber (NASDAQ:UBER), whose value lies in its software.

In the 2021 go-go market, SWVL bought operators in Europe and South America, expanding from a base in the Middle East. SPAC was worth $1.5 billion when it launched, generating a private equity investment (PIPE) of $121.5 million. After the IPO (Initial Public Offering), the company continued to grow for several months, signing an agreement with a Kuwaiti service to use its software in August.

Shortly after the IPO, SWVL was promised $600 million from Principal B. Riley, with certain conditions. B. Riley invested in Basic scientist (NASDAQ:CORZ), a crypto miner who filed for bankruptcy this week.

In its latest financial report, for the six months ending June, SWVL reported a loss of $161 million and revenue of $40.7 million. The operating loss was $71 million. The unaudited report claimed the company had $19 million in cash at the end of the period and negative operating cash flow of $76 million. What kept it afloat was $97 million in investing cash flow, mostly from stock sales.

What happens next?

I guess what happens next, like with Core, is bankruptcy. It’s part of a general trend where regional startups are collapsing on the global demand for profits rather than growth.

As of the date of publication, Dana Blankenhorn does not hold any positions at the companies mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

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