Selina, a hotel and experiences brand focused on youth travelers, said on Wednesday that its financial metrics were trending in the right direction as it reported earnings results.
25.08.2023 - 13:40 / skift.com / Sean Oneill
Selina was one of about a dozen travel companies that went public last year by merging with blank check companies called special purpose acquisition companies (SPACs). Most have since been in the doldrums.
For instance, Sonder and Vacasa this month received notices from their stock exchange, Nasdaq threatening de-listing if they can’t boost their share prices.
Selina’s financial update on Monday suggested it had an opportunity to avoid a similar scenario and potentially push its share price back closer to its initial public offering price of $9.75 last October. Its share price has stayed above the $1 a share threshold — and was at about $1.50 per share on Monday.
The big problem? Selina said it lost $198 million and generated only generated $184 million in revenue in the last three months of 2023. That led to a high cash burn for a company that only had cash-on-hand of $47.7 million as of December 31.
In an eye-brow-raising move, the company used its first earnings disclosure as a public company only to release financial results for the last months of 2022. It didn’t report results for the first quarter of 2023 the way all of its peer companies did.
Yet analyst Edward Reilly at EF Hutton was bullish on Selina in a pre-earnings report, citing a few paths the company’s management could take toward right-sizing the business.
“Opening locations that ramp faster in occupancy and deliver more attractive financial performance; expanding existing locations with remodels and incremental leased spaces; and leveraging its brand to receive flexible lease terms with longer grace periods while shifting to variable rent for some new locations,” Reilly wrote.
Selina’s executives made their own case during a Monday earnings call about how they could bring the company to profitability. Here are the top points:
So what are the risks? Reilly at EF Hutton summarized them. Selina is:
In summary, a recently revamped board of directors may be improving the company’s corporate governance, such as instituting cost controls at the corporate level and prompting serious talk about asset sales.
Selina, a hotel and experiences brand focused on youth travelers, said on Wednesday that its financial metrics were trending in the right direction as it reported earnings results.
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