Vroom, Inc. VRM shares are trading lower in Monday’s after-hours session after the company announced it is discontinuing its operations and winding down its used vehicle dealership business.
Company’s Drastic Decision Vroom has shocked investors with its announcement after the market closed on Monday, resulting in a staggering drop of over 50% in its share price. The decision was made to “preserve liquidity and enable the company to maximize stakeholder value through its remaining businesses.”
The company’s board of directors approved the Value Maximization Plan, under which Vroom is halting transactions via vroom.com, intending to liquidate its existing used vehicle inventory through wholesale channels, discontinuing the acquisition of additional vehicles, and implementing a workforce reduction in line with its scaled-down operations.
Thomas Shortt’s Remarks, the CEO, expressed his disappointment, saying “As we previously disclosed, we intended to raise additional capital to fund our operations and support the extension of our vehicle floorplan facility beyond its current expiration date of March 31, 2024. Despite significant efforts to do so, we ultimately were unable to raise the necessary capital in the current market.” He went on to acknowledge the dedicated efforts of the team and expressed gratitude to investors, customers, and business partners for their support over the years.
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Market Reaction The announcement led to a massive 55.67% plunge in Vroom’s share price, which stood at a mere $0.23 in the after-hours session at the time of publication, according to Benzinga Pro.
Photo: Oleg Gamulinskii from Pixabay
