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.
Recent Development: Vroom made a significant announcement, causing their shares to plummet by over 50% in after-hours trading. The decision to discontinue operations aims to “preserve liquidity and enable the company to maximize stakeholder value through its remaining businesses.”
The company’s board of directors has approved the Value Maximization Plan, which involves halting transactions via vroom.com, liquidating existing used vehicle inventory through wholesale channels, discontinuing the acquisition of additional vehicles, and implementing a workforce reduction in accordance with its scaled-down operations.
Statement from the CEO: Thomas Shortt, the CEO of Vroom, conveyed, “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.”
“Obviously, we are very disappointed with this outcome. Two years ago, we set out to build a well-oiled machine, improve unit economics and dramatically enhance our customer experience, and I believe we achieved those goals. I want to thank our dedicated Vroommates, customers and business partners, as well as our board of directors and investors, all of whom have supported us over the years.”
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VRM Price Movement: Vroom shares experienced a massive decline of 55.67%, settling at $0.23 in the after-hours session at the time of publication, according to Benzinga Pro.
Photo: Oleg Gamulinskii from Pixabay