Announcement • Mar 08
Combined Hearing for DS & Plan Rejected for Shift Technologies, Inc. The US Bankruptcy Court gave an order rejecting the combined hearing to consider approval of disclosure statement and plan of Shift Technologies, Inc. on March 7, 2024. The debtor had filed its disclosure statement and plan in the Court on February 20, 2024. Announcement • Oct 20
Shift Technologies, Inc.(OTCPK:SFTG.Q) dropped from NASDAQ Composite Index Shift Technologies, Inc. has been removed from NASDAQ Composite Index . Announcement • Oct 16
Maruthi J. D. Venkata Sends Letter to the Board of Shift Technologies On May 26, 2023, Maruthi J. D. Venkata sent a letter to the Board of Directors of Shift Technologies, Inc. In the letter, Maruthi J. D. Venkata expressed his concern over the Company’s operation and financial performance and suggested the Company to (i) immediately restructure its debt, and (2) seek a strategic sale to private equity. Maruthi J. D. Venkata also demanded an observer seat on the Board and any special committee of the Board in charge of the strategic alternatives process. Announcement • Oct 13
Shift Technologies, Inc.(NasdaqCM:SFT) dropped from S&P TMI Index Shift Technologies, Inc.(NasdaqCM:SFT) dropped from S&P TMI Index Announcement • Oct 12
Nasdaq Commences Proceedings to Delist the Shift Technologies' Common Stock On October 10, 2023, the Shift Technologies, Inc. was notified by the Listing Qualifications Staff (the ‘Staff’) of the Nasdaq Stock Market LLC (‘Nasdaq’) that it commenced proceedings to delist the common stock of the Company, par value $0.0001 (the ‘Common Stock’) pursuant to Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, and has determined that the Common Stock will be delisted from the Nasdaq due to the Company’s filing of voluntary cases under Chapter 11 of the Bankruptcy Code. The Company does not intend to appeal the determination and, therefore, it is expected that its Common Stock will be delisted, which would not affect any actions it may take in bankruptcy and does not change its reporting requirements under the rules of the Securities and Exchange Commission (the ‘SEC’). Trading of the Common Stock will be suspended by Nasdaq at the opening of business on October 19, 2023. Announcement • Sep 29
Shift Technologies, Inc. Announces Board and Committee Changes Shift Technologies, Inc. announced that on September 22, 2023, Luis Ignacio Solorzano Aizpuru, member of the Board of the Company, informed the Company of his decision to resign as a director of the Company, effective September 22, 2023. Mr. Solorzano served as a Class II director, a member of the Audit Committee and member of the Finance Committee of the Board. Mr. Solorzano’s decision to resign from the Board was not the result of any disagreement relating to the Company’s operations, policies or practices. The Company thanks Mr. Solorzano for his commitment and service to the Company. After giving effect to the foregoing director resignation of Mr. Solorzano from the Board, the Board consists of four (4) directors and three (3) vacancies. In connection with Mr. Solorzano’s resignation from the Board, on September 26, 2023, the Board resolved that Adam Nash will serve as a member of the Audit Committee. Pursuant to the Company’s Director Compensation Policy, Mr. Nash will receive an additional cash retainer of $10,000 for his service on the Audit Committee, prorated for service for less than an entire annual period. Announcement • Aug 30
Shift Technologies, Inc. Announces Resignation of Victoria Mcinnis as Member of the Board of Directors On August 22, 2023, Victoria McInnis, member of the Board of Directors of Shift Technologies, Inc. informed the Company of her decision to resign as a director of the Company, effective August 22, 2023. Ms. McInnis served as a Class I director, a member of the Audit Committee and Chair of the Leadership Development, Compensation and Governance Committee of the Board. Ms. McInnis’ decision to resign from the Board was not the result of any disagreement relating to the Company’s operations, policies or practices. The Company thanks Ms. McInnis for her commitment and service to the Company. After giving effect to the foregoing director resignation of Ms. McInnis from the Board, the Board consists of six (6) directors and one (1) vacancy. Announcement • Jul 23
Shift Technologies, Inc. to Report Q2, 2023 Results on Aug 10, 2023 Shift Technologies, Inc. announced that they will report Q2, 2023 results on Aug 10, 2023 Announcement • Jul 12
Shift Technologies, Inc. Plans to Reduce the Workforce Shift Technologies, Inc. announced a plan to restructure and reduce the company’s workforce to better align people and responsibilities with the company’s omnichannel sales strategy. The restructuring plan is the result of a review by the company’s recently appointed CEO Ayman Moussa as well as evaluations conducted as part of the company’s review of strategic alternatives. The new structure is designed to improve the customer experience, increase efficiencies throughout the sales process, and better leverage its fixed costs. The company has also decided to eliminate investment into the company’s dealer marketplace business in order to focus on core operations. As a result of the restructuring, the company expects to reduce its headcount by approximately 34%. Approximately 60% of the headcount reductions are in operational roles, primarily as a result of eliminating centralized support. The remaining headcount reductions are concentrated among technology roles as a result of eliminating investment into the dealer marketplace, as well as general corporate roles. The company expects the reduction in force to result in annualized SG&A savings of approximately $14 million. The Company expects to incur non-recurring charges of approximately $900,000, consisting primarily of employee severance costs. The strategic alternatives review process established to maximize value for all stakeholders is ongoing. Announcement • Jun 29
Shift Technologies, Inc. Announces Executive Changes Shift Technologies, Inc. (the “ Company”) is announcing that Sean Foy is no longer the Chief Operating Officer of the Company, effective June 23, 2023 (the “ Effective Date”). The Company presently does not have any plans to fill the position of Chief Operating Officer, and Ayman Moussa, Chief Executive Officer of the Company, assumed oversight of the majority of Mr. Foy’s operational duties as of the Effective Date. Announcement • May 17
Shift Technologies, Inc. announced delayed 10-Q filing On 05/16/2023, Shift Technologies, Inc. announced that they will be unable to file their next 10-Q by the deadline required by the SEC. Reported Earnings • May 13
First quarter 2023 earnings released: US$2.84 loss per share (vs US$6.97 loss in 1Q 2022) First quarter 2023 results: US$2.84 loss per share (improved from US$6.97 loss in 1Q 2022). Revenue: US$57.7m (down 74% from 1Q 2022). Net loss: US$48.1m (loss narrowed 16% from 1Q 2022). Revenue is forecast to grow 19% p.a. on average during the next 3 years, compared to a 6.3% growth forecast for the Specialty Retail industry in the US. Reported Earnings • Mar 31
Full year 2022 earnings: EPS exceeds analyst expectations Full year 2022 results: US$19.91 loss per share. Revenue: US$670.8m (up 5.3% from FY 2021). Net loss: US$172.0m (loss widened 3.5% from FY 2021). Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 16%. Revenue is forecast to grow 2.8% p.a. on average during the next 3 years, compared to a 5.9% growth forecast for the Specialty Retail industry in the US. Announcement • Feb 13
Shift Technologies Receives Written Notice from Nasdaq Regarding Minimum Value of Listed Securities As previously disclosed, on December 22, 2022, Shift Technologies, Inc. received a written notice (the “ MVLS Notice”) from the Listing Qualifications Department (the “ Staff”) of The Nasdaq Stock Market LLC (“ Nasdaq”) notifying the Company that, for the last 30 consecutive business days, the Company’s Minimum Value of Listed Securities was below the minimum of $35 million required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq listing rule 5550(b)(2) (the “ MVLS Requirement”). On February 8, 2023, the Company received a written notice from the Staff notifying the Company that the Staff is withdrawing the MVLS Notice and closing the matter upon determining, after its review of a Change in Shares Outstanding form submitted by the Company, that the Company would have met the MVLS Requirement within the applicable 30-business day period. As previously disclosed, the Company has until April 3, 2023 to regain compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) (the “ Bid Price Requirement”) with respect to the Company’s Class A common stock, par value $0.0001 per share (“ Class A common stock”). The Company intends to monitor the closing bid price of its Class A common stock and may, if appropriate, consider available options to regain compliance with the Bid Price Requirement. However, there can be no assurance that the Company will be able to regain compliance with the Bid Price Requirement. Announcement • Feb 03
A local dealership group has agreed to acquire East Coast Stores of Shift Technologies, Inc. (NasdaqCM:SFT). An unknown local dealership group has agreed to acquire East Coast Stores of Shift Technologies, Inc. (NasdaqCM:SFT) on February 2, 2023. The store leases, inventory, and related assets in Richmond, VA, Charlottesville, VA, and Tampa, FL, will be assumed by a local dealership group. The stores in Midlothian, VA, Charlotte, NC, and Greensboro, NC will be closed, effective today. Board Change • Nov 16
High number of new and inexperienced directors There are 7 new directors who have joined the board in the last 3 years. The company's board is composed of: 7 new directors. No experienced directors. No highly experienced directors. Independent Director Kellyn Kenny is the most experienced director on the board, commencing their role in 2020. The following issues are considered to be risks according to the Simply Wall St Risk Model: Lack of board continuity. Lack of experienced directors. Reported Earnings • Nov 12
Third quarter 2022 earnings: Revenues exceed analysts expectations while EPS lags behind Third quarter 2022 results: US$0.92 loss per share (further deteriorated from US$0.48 loss in 3Q 2021). Revenue: US$161.9m (down 10.0% from 3Q 2021). Net loss: US$75.8m (loss widened 103% from 3Q 2021). Revenue exceeded analyst estimates by 15%. Earnings per share (EPS) missed analyst estimates by 111%. Revenue is forecast to grow 32% p.a. on average during the next 3 years, compared to a 6.0% growth forecast for the Specialty Retail industry in the US. Price Target Changed • Oct 05
Price target increased to US$5.40 Up from US$4.50, the current price target is an average from 5 analysts. New target price is 713% above last closing price of US$0.66. Stock is down 90% over the past year. The company is forecast to post a net loss per share of US$2.00 next year compared to a net loss per share of US$2.13 last year. Major Estimate Revision • Aug 16
Consensus forecasts updated The consensus outlook for 2022 has been updated. 2022 revenue forecast fell from US$1.01b to US$708.9m. EPS estimate increased from -US$2.11 to -US$1.93 per share. Specialty Retail industry in the US expected to see average net income decline 7.0% next year. Consensus price target down from US$4.50 to US$4.19. Share price fell 8.6% to US$1.17 over the past week. Reported Earnings • Aug 10
Second quarter 2022 earnings: EPS and revenues miss analyst expectations Second quarter 2022 results: US$0.65 loss per share (down from US$0.41 loss in 2Q 2021). Revenue: US$223.7m (up 45% from 2Q 2021). Net loss: US$52.2m (loss widened 65% from 2Q 2021). Revenue missed analyst estimates by 4.1%. Earnings per share (EPS) also missed analyst estimates by 16%. Over the next year, revenue is forecast to grow 53%, compared to a 6.3% growth forecast for the industry in the US. Seeking Alpha • Aug 10
Shift Technologies: More Roadkill In The Online Auto Retailing Space Today, we take our first look at Shift Technologies, a fast-growing name in the ecommerce auto retailing space that just made a major purchase.
Despite over 100% revenue growth last quarter, the company is far away from profitability.
Shift Technologies just reported second quarter results. The company also disclosed it will acquire CarLotz.
As overall auto sales in the U.S. are now declining, how will the company fare in the quarters ahead? An investment analysis follows in the paragraphs below.
Sooner or later in life, we will all take our own turn being in the position we once had someone else in. ― Ashly Lorenzana
Today, we put the spotlight on Shift Technologies (SFT) for the first time in this column. The company is in what has become a fast-growing part of auto retailing market, but one that has attracted myriad competitors. Despite solid revenue growth the stock finds itself deep in Busted IPO territory. The company just announced a major acquisition. Can the shares rebound? An analysis follows below.
Seeking Alpha
Company Overview:
Shift Technologies is based in San Francisco. The company provides an ecommerce platform for buying and selling used cars and is in both the Retail and Wholesale parts of the market. Shift's platform enables mobile digital transaction, such as at-home car searching, scheduling an on-demand test drive, and purchasing at home or at the preferred site of a test drive, as well as provides financing and services. It also offers add on services such as vehicle service contracts wheel and tire coverage, and prepaid maintenance plans.
The company came public via a merger with sponsored blank-check company, INSU Acquisition late in 2020. In March of this year, Shift agreed to acquire certain assets of Fair Technologies for a combination of cash and shares of Shift's Class A common stock. Part of the purchase was financed via notes at 6% interest due in 2025. Fair Technologies ran an online auto marketplace and the deal expanded the company's inventory, capabilities and added engineering and design team talent. The purchase provided customers greater access to a larger selection of owned and third-party vehicles for a test drive or direct purchase. The stock currently trades around $1.30 a share and has an approximate market capitalization of $110 million.
First Quarter Results:
On May 11th, the company posted first quarter numbers. The company had a GAAP loss of 70 cents a share, more than a dime a share less than expectations. Revenues rose more than 105% on a year-over-year basis to nearly $220 million. Even that robust growth was nearly $15 million below the consensus. The company sold 6,741 ecommerce vehicles during the quarter, up over 50% from the levels of 1Q2021.
Second Quarter Results:
The company reported second quarter results yesterday. Once again the company missed expectations both on the top and bottom lines. Shift Technologies posted a non-GAAP loss of 64 cents a share as revenue growth slowed to some 44% on a year-over-year basis to $223.7 million. The company also disclosed it will acquire CarLotz (LOTZ) in an all-stock deal. CarLotz had just over 2,400 vehicle sales in the second quarter.
Growth is noticeably slowing in recent quarters. Year over year sales comparisons are also going to get harder in coming quarters as the company focuses on more profitable sales. In addition, overall autos sales are contracting as one can see here in July auto sales that show all the major manufacturing seeing significant demand challenges. This is due to higher interest rates, continued supply chain challenges and ebbing demand due to a fast slowing economy, which is likely in recession as I detailed earlier this week.
Analyst Commentary & Balance Sheet:
The analyst community is largely negative on the company at the moment. Since the last earnings report, four analyst firms including William Blair and BTIG have maintained downgraded the shares to a Hold rating. Only Piper Sandler ($9 price target) and Cantor Fitzgerald ($4 price target) have remained in the Bull camp.
Approximately 20% of the shares outstanding are currently held short. There has been no insider activity in the shares for more than a year. The company ended the first quarter with just over $105 million worth of cash and marketable securities on the balance sheet after burning through $88 million worth of cash during the quarter. $38 million of that was to build inventory and additional funds were used for last year's incentive payment. Management anticipates cash burn will be reduced substantially in the coming quarters. Long term debt stands at approximately $145 million. Reported Earnings • May 11
First quarter 2022 earnings: EPS in line with analyst expectations despite revenue beat First quarter 2022 results: US$0.70 loss per share (down from US$0.55 loss in 1Q 2021). Revenue: US$219.6m (up 107% from 1Q 2021). Net loss: US$57.0m (loss widened 33% from 1Q 2021). Revenue exceeded analyst estimates by 5.1%. Earnings per share (EPS) were mostly in line with analyst estimates. Over the next year, revenue is forecast to grow 54%, compared to a 8.0% growth forecast for the industry in the US. Price Target Changed • Apr 27
Price target decreased to US$6.85 Down from US$9.40, the current price target is an average from 12 analysts. New target price is 386% above last closing price of US$1.41. Stock is down 84% over the past year. The company is forecast to post a net loss per share of US$2.30 next year compared to a net loss per share of US$2.13 last year. Board Change • Apr 27
High number of new and inexperienced directors There are 8 new directors who have joined the board in the last 3 years. The company's board is composed of: 8 new directors. No experienced directors. No highly experienced directors. Independent Director Kellyn Kenny is the most experienced director on the board, commencing their role in 2020. The following issues are considered to be risks according to the Simply Wall St Risk Model: Lack of board continuity. Lack of experienced directors. Reported Earnings • Mar 18
Full year 2021 earnings: EPS and revenues exceed analyst expectations Full year 2021 results: US$2.13 loss per share (up from US$3.12 loss in FY 2020). Revenue: US$636.9m (up 225% from FY 2020). Net loss: US$166.3m (loss widened 181% from FY 2020). Revenue exceeded analyst estimates by 1.6%. Earnings per share (EPS) also surpassed analyst estimates by 4.6%. Over the next year, revenue is forecast to grow 63%, compared to a 11% growth forecast for the retail industry in the US. Price Target Changed • Mar 16
Price target decreased to US$7.55 Down from US$9.60, the current price target is an average from 12 analysts. New target price is 289% above last closing price of US$1.94. Stock is down 79% over the past year. The company is forecast to post a net loss per share of US$2.04 next year compared to a net loss per share of US$3.12 last year. Price Target Changed • Feb 03
Price target decreased to US$9.40 Down from US$10.20, the current price target is an average from 12 analysts. New target price is 339% above last closing price of US$2.14. Stock is down 74% over the past year. The company is forecast to post a net loss per share of US$2.04 next year compared to a net loss per share of US$3.12 last year. Price Target Changed • Jan 06
Price target decreased to US$10.30 Down from US$11.40, the current price target is an average from 12 analysts. New target price is 234% above last closing price of US$3.08. Stock is down 61% over the past year. The company is forecast to post a net loss per share of US$2.04 next year compared to a net loss per share of US$3.12 last year. Price Target Changed • Dec 11
Price target decreased to US$11.40 Down from US$12.64, the current price target is an average from 12 analysts. New target price is 189% above last closing price of US$3.95. Stock is down 54% over the past year. The company is forecast to post a net loss per share of US$2.04 next year compared to a net loss per share of US$3.12 last year. Reported Earnings • Nov 16
Third quarter 2021 earnings released: US$0.48 loss per share (vs US$6.96 loss in 3Q 2020) The company reported a solid third quarter result with improved revenues and control over costs, although losses increased. Third quarter 2021 results: Revenue: US$179.8m (up 200% from 3Q 2020). Net loss: US$37.4m (loss widened 60% from 3Q 2020). Reported Earnings • Aug 13
Second quarter 2021 earnings released: US$0.41 loss per share (vs US$5.79 loss in 2Q 2020) The company reported a solid second quarter result with improved revenues and control over costs, although losses increased. Second quarter 2021 results: Revenue: US$154.9m (up 377% from 2Q 2020). Net loss: US$31.7m (loss widened 67% from 2Q 2020). Major Estimate Revision • Aug 12
Consensus forecasts updated The consensus outlook for 2021 has been updated. 2021 revenue forecast increased from US$509.3m to US$588.3m. EPS estimate fell from -US$1.85 to -US$1.89 per share. Specialty Retail industry in the US expected to see average net income growth of 12% next year. Consensus price target up from US$12.64 to US$13.13. Share price rose 4.2% to US$8.53 over the past week. Recent Insider Transactions • Jun 02
Chief Financial Officer recently bought US$70k worth of stock On the 27th of May, Oded Shein bought around 10k shares on-market at roughly US$7.00 per share. This was the largest purchase by an insider in the last 3 months. This was Oded's only on-market trade for the last 12 months. Reported Earnings • May 13
First quarter 2021 earnings released: US$0.55 loss per share (vs US$0.35 loss in 1Q 2020) The company reported a solid first quarter result with improved revenues and control over costs, although losses increased. First quarter 2021 results: Revenue: US$106.0m (up 254% from 1Q 2020). Net loss: US$42.8m (loss widened 247% from 1Q 2020). Executive Departure • May 05
Senior VP of Accounting & Controller has left the company On the 3rd of May, Blima Tuller's tenure as Senior VP of Accounting & Controller ended after less than a year in the role. We don't have any record of a personal shareholding under Blima's name. Blima is the only executive to leave the company over the last 12 months. Major Estimate Revision • Mar 16
Analysts update estimates The 2021 consensus revenue estimate increased from US$393.3m to US$444.6m. Earning per share (EPS) estimate was further reduced from -US$1.40 to -US$1.68 for the same period. The Specialty Retail industry in the US is expected to see an average net income growth of 19% next year. The consensus price target was lowered from US$14.00 to US$12.33. Share price is up 27% to US$9.79 over the past week. Reported Earnings • Mar 11
Full year 2020 earnings released: US$3.12 loss per share (vs US$2.33 loss in FY 2019) The company reported a solid full year result with reduced losses, improved revenues and improved control over expenses. Full year 2020 results: Revenue: US$195.7m (up 18% from FY 2019). Net loss: US$59.1m (loss narrowed 27% from FY 2019). Analyst Estimate Surprise Post Earnings • Mar 11
Revenue and earnings beat expectations Revenue exceeded analyst estimates by 0.2%. Earnings per share (EPS) also surpassed analyst estimates by 60%. Over the next year, revenue is forecast to grow 127%, compared to a 24% growth forecast for the Specialty Retail industry in the US. Is New 90 Day High Low • Mar 09
New 90-day low: US$7.68 The company is down 18% from its price of US$9.31 on 08 December 2020. The American market is up 3.0% over the last 90 days, indicating the company underperformed over that time. It also underperformed the Specialty Retail industry, which is up 15% over the same period.