Vroom, Inc. VRM shares took a nosedive in the after-hours session on Monday, following the company’s announcement of discontinuing its operations in the used vehicle dealership business, causing the stock to plummet by over 50%. The abrupt decision was made in an attempt to “preserve liquidity and enable the company to maximize stakeholder value through its remaining businesses.”
The Unfolding of Vroom’s Volatile Market Plight
Vroom’s board of directors ratified the Value Maximization Plan, marking a sudden halt to transactions via vroom.com. The company intends to liquidate its existing used vehicle inventory through wholesale channels, cease acquiring additional vehicles, and undergo a workforce reduction to align with its downsized operations.
CEO’s Lament Over Capital Crunch
Thomas Shortt, the company’s beleaguered CEO, expressed the struggles Vroom faced in trying to raise additional capital to fund operations and extend its vehicle floorplan facility. Regrettably, their efforts were fruitless in the current market state, leading to the grim decision.
In a poignant reflection, Shortt remarked, “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.”
Related Link: Why Agilysys Stock Slumps After-Hours
Market Fallout and Numbers
Subsequently, in the after-hours session, Vroom’s stock plunged by a staggering 55.67% to $0.23, as revealed by Benzinga Pro.
Photo: Oleg Gamulinskii from Pixabay
