Benzinga - by Ryan Gustafson, Benzinga Staff Writer.
Vroom, Inc. (NASDAQ: 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.
What To Know: Vroom announced on Monday after the close of the market, causing shares to plunge by over 50%. The goal of the decision is to, "preserve liquidity and enable the company to maximize stakeholder value through its remaining businesses."
The company's board of directors approved the Value Maximization Plan, under which Vroom is halting transactions via vroom.com, intending to liquidate its existing used vehicle inventory through wholesale channels, discontinuing the acquisition of additional vehicles, and implementing a workforce reduction in line with its scaled-down operations.
Thomas Shortt, the company's CEO, stated, "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 improve 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 Action: Shares of Vroom were down 55.67% at $0.23 in the after-hours session at the time of publication, according to Benzinga Pro.
Photo: Oleg Gamulinskii from Pixabay
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