“Drastic price drop” – US stock market threatens air taxi developer Lilium with expulsion
Air taxi start-up Lilium is caught in a funding trap
Source: pa/dpa/Lilium/-
The US technology exchange Nasdaq has sent a threatening letter to the German air taxi start-up Lilium. The background is the deep fall of the stock. The board is now considering a radical step.
Et was just a fear at first, but now the US technology exchange Nasdaq is officially threatening to throw the electric air taxi manufacturer Lilium out. The reason is the drastic fall in the share price from around ten dollars in autumn 2021 to just over 50 cents recently.
The German start-up with great ambitions confirms on its website that a letter from Nasdaq was received on April 13th. After that, the share price no longer meets the minimum requirements for further listing.
In the past 30 days, the rate has been below the minimum level of one dollar. Lilium has been given a 180-day deadline to raise the price above the one-dollar mark for at least ten consecutive days by October 10. Then Lilium should remain on the US stock exchange.
Whether this will succeed is an open question. The air taxi start-up is stuck in a financing trap. There is a lack of resounding positive reports for a price increase, which slows down the willingness of investors. In addition, after earlier high-flying plans for air taxis, disillusionment has returned to the market. It turns out that the approval of a model takes longer than expected.
But Lilium still needs hundreds of millions before commercial launch, with virtually no revenue. In 2022 alone, the loss was 253 million euros, bringing the total losses to more than 820 million euros over the past three years.
According to the most recent announcements, Lilium does not expect the first registration of the electric air taxi until the end of 2025. Until the first manned test flight in the second half of 2024, the company still needs 300 million dollars.
Lilium remains optimistic
Despite the price crash and the Nasdaq threatening letter, Lilium remains optimistic. The company expects to remain on the Nasdaq technology exchange, a spokesman explains when asked by WELT. If necessary, measures would be taken to continue to fulfill the conditions of a further listing in the future.
In addition, under certain conditions, a further extension of 180 days is possible, the spokesman explains, in order to meet the one-dollar exchange rate rule. “We consider the chances of this to be very good.”
An official statement emphasizes that the Nasdaq letter is not expected to have any impact on business operations. There is also an indication of how staying on the Nasdaq might be achieved: a reverse stock split is mentioned as a possible measure to increase the share price.
It would be a dig into the toolbox of financial experts. The number of shares would decrease with the share capital remaining unchanged and the price would increase. A shareholder would have an unchanged total value of Lilium shares if there were fewer.
In exchange documents, however, Lilium also describes what it would mean if the Nasdaq actually pulls the ripcord. “A delisting would likely have an adverse impact on the price of our Class A shares and public warrants,” it said. It may become more difficult to sell or buy the securities.
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