SWVL, the Egyptian-born transport startup once heralded as a unicorn, has found itself at the receiving end of warning notices from the American stock trading exchange Nasdaq. These notices delivered a stark message: SWVL had failed to uphold a minimum market value of publicly held shares amounting to $15,000,000 on Nasdaq Global Market, potentially facing delisting. The most recent warning, dated December 26, 2023, highlighted the company’s non-compliance with Nasdaq Rule 5450(a)(1), as its Class A ordinary shares’ closing bid price had fallen below $1.00 per share for 30 consecutive business days.
SWVL’s trajectory on Nasdaq tells a tale of ups and downs. After migrating from Nasdaq Global Market to the lesser Nasdaq Capital Market in July 2023 in a bid to alleviate regulatory pressures, its share value plummeted from a pinnacle of US$9.95 per share on IPO day in April 2022 to a low of $0.84 by October of the following year. Despite concerted efforts by the company, including a share consolidation initiative merging every 25 shares into one, internal restructuring that involved divesting from Urbvan — a Mexico City-based transportation service acquired in July 2022 — and a board overhaul incorporating industry stalwart Ayman Ismail Mohamed Ahmed, formerly President of North Africa and Chairman & CEO at Pepsi, SWVL continued to grapple with its Nasdaq performance.
However, the tide has turned once more for SWVL on Nasdaq, with its shares now trading at $15 per share following the company’s recent announcement of profitability. In late December of last year, SWVL disclosed a remarkable shift in operating profits from a loss of $56.0 million to a profit of $13.4 million, despite a decrease in revenue from $21,671,391 to $11,116,013, indicating underlying challenges in revenue growth.
| S/N | NAME OF COMPANY | INDUSTRY | SPAC MERGER COMPLETION DATE | STOCK MARKET | PRICE PER SHARE AT FIRST DAY OF PUBLIC TRADING (IN USD ) | CURRENT PRICE PER SHARE AS AT APRIL 5, 2024 (IN USD) |
|---|---|---|---|---|---|---|
| 1 | Anghami, Inc. | Music Streaming | February 4, 2022 | Nasdaq | 8.88 | 1.02 |
| 2 | Swvl Holdings Corp | Digital Transport | March 31, 2022 | Nasdaq | 9.33 | 15.32 |
| 3 | Forge Global Holdings, Inc | Software Application | March 21, 2022 | NYSE | 10.11 | 1.99 |
| 4 | Cepton, Inc. | Software Application | February 14, 2022 | Nasdaq | 9.2 | 3.25 |
| 5 | GreenLight Biosciences Holdings, PBC | Biotechnology | February 2, 2022 | Nasdaq | 8.82 | Closed July 25, 2023 after merger with SW MergerCo, Inc. |
| 6 | Dave Inc. | Fintech | January 05, 2022 | Nasdaq | 8.02 | 37.77 |
| 7 | Cvent Holding Corp | Cloud-based enterprise | December 17, 2021 | Nasdaq | 8.19 | Closed on June 16, 2023 after merger with Blackstone Inc. |
| 8 | Boxed, Inc | Ecommerce Retailing | August 12, 2021 | Nasdaq | 9.98 | Delisted on Sep 5, 2023 after share cancellation |
| 9 | Vacasa, Inc. | Rental Management Platform | December 06, 2021 | Nasdaq | 9.97 | 6.20 |
| 10 | BigBear.ai Holdings, Inc. | Artificial Intelligence | December 07, 2021 | Nasdaq | 10.03 | 1.93 |
| 11 | BuzzFeed, Inc. | Digital Media | December 3, 2021 | Nasdaq | 9.62 | 0.41 |
| 12 | Lottery.com | Gambling | November 19, 2021 | Nasdaq | 8.23 | 2.14 |
| 13 | DocGo Inc. | Mobile Health Platform | November 17, 2021 | Nasdaq | 9.57 | 3.81 |
| 14 | Embark Technology, Inc. | Self-driving software solutions | November 10, 2021 | Nasdaq | 8.80 | Delisted on August 2, 2023 after acquisition by Applied Intuition |
| 15 | Nerdy Inc. | Live online learning platform | September 20, 2021 | Nasdaq | 11.20 | 2.84 |
| 16 | Offerpad Solutions Inc. | Real Estate Platform | September 01, 2021 | Nasdaq | 8.80 | 7.24 |
| 17 | SmartRent, Inc. | Enterprise software- Smart home operating system | August 24, 2021 | Nasdaq | 12 | 2.56 |
| 18 | Matterport, Inc. | Data | July 22, 2021 | Nasdaq | 15.00 | 2.06 |
| 19 | Sunlight Financial Holdings, Inc. | B2B2C POS Fintech | July 09, 2021 | Nasdaq | 7.97 | Filed for Chapter 11 Bankruptcy on November 1, 2023 |
| 20 | Playstudios Inc. | Gaming | June 21, 2021 | Nasdaq | 5.8 | 2.91 |
Analyzing SWVL’s Recent Resurgence
While the sustainability of SWVL’s current share value remains uncertain, several factors may have contributed to its Nasdaq revival:
A. Enhanced Regulatory Compliance
SWVL’s leadership has evidently pivoted towards a more regulatory-conscious approach. While the company’s founders have been lauded for their swift execution, this agility had previously posed regulatory risks. It appears that the management has recognized this vulnerability, aligning its operations more closely with regulatory standards, including the decision to shift to the Nasdaq Capital Market for enhanced stability.
B. Streamlined Business Model
SWVL’s journey has been marked by significant fundraising, costly SPAC IPO fees, and substantial acquisitions, such as Volt Lines, Zeelo, and Urbvan Mobility Ltd in 2022. However, mounting compliance and operational expenses, coupled with underwhelming performance on Nasdaq, necessitated a strategic reassessment. The company’s recent divestments in Zeelo and Urbvan as well as layoffs have resulted in a leaner operational model, contributing to its valuation rebound.
C. Strengthened Corporate Governance
Acknowledging early challenges in adapting to public company status and heightened regulatory scrutiny, SWVL has proactively revamped its corporate governance practices. This includes recent board restructuring, with notable departures and appointments. Ayman Ismail Mohamed Ahmed’s induction, with his distinguished background encompassing leadership roles at Pepsi and Procter & Gamble, signifies a concerted effort towards bolstering governance and oversight. Ayman’s appointment came after W. Steve Albrecht and Gbenga Oyebode, resigned from the company’s board of directors and audit committee in May last year.
SWVL’s resurgence on Nasdaq underscores its resilience amidst adversity, yet the company remains in a precarious balancing act as it navigates the complexities of the public market landscape.
