From $1.2 billion to $12 million: Selina's valuation continues to crumble
From $1.2 billion to $12 million: Selina's valuation continues to crumble
The hospitality company claims to have reduced its debt by $52 million and its co-founders have announced they are converting cash compensation into shares to strengthen credibility, but investors remain unimpressed
Hospitality company Selina has hit a new low, seeing its market cap fall to just $12 million earlier this week. During the boom period in the high-tech sector, Selina took advantage of the sharp value increases in the market and the trend of SPAC mergers, and at the end of 2022 went public via a SPAC merger. In its first days of trading, its share price jumped from $10 to $40.9 and its value soared to $1.2 billion, but this didn't last long. With the interest rate hikes, the bubbles of the tech and SPAC sectors burst, and companies like Selina, which operate traditional businesses while donning a startup business model, got burned. Accordingly, since Selina went public, its stock has crashed by 99%, and it is currently trading for only $0.079, with a market cap of just $24 million, and this only after climbing on Tuesday from Monday’s low.
Selina announced on Tuesday that CEO and co-founder Rafael Museri, Chief Growth Officer and co-founder Daniel Rudasevski, and recently promoted COO Gadi Hassin, have converted approximately $500,000 of cash compensation into shares of common stock.
“It is important for us to remind our financial community that we are fully aligned with our shareholders. We are as disappointed as they are in the recent stock decline. However, we do not believe it is based on the fundamentals of the business,” stated Museri.
Last December, Selina announced an investment agreement in principle that would see it receive up to $68 million from Osprey Investments.
According to the agreement, Osprey would immediately invest $20 million in exchange for Selina shares, and another $8 million over the coming year, subject to further shareholder approval for the issuance of ordinary shares required for elements of the transaction.
Assuming that the agreement is completed, and that Osprey converts the debt into shares and exercises the options for further investment, it will become the controlling owner of Selina, leaving its founders, Museri and Rudasevski, with the possession of only a few percent of the company.
According to data in a presentation it released last week, Selina has commitments for $35.5 million of the $68 million it previously announced and it has reduced its debt by $52 million. The company claims it will cut the debt by an additional $21 million during 2024 and that it expects a positive cash flow in 2025.
That remains to be seen as Selina continues with the series of aggressive steps due to its precarious financial situation. Founded in 2014, Selina has recorded losses every year since its inception, and these include a loss of $198 million in 2022, a loss of $186 million in 2021 and a loss of $139 million in 2020. In its reports for the first half of 2023, Selina reported a loss of $46 million, a reduction of about 50% compared to the corresponding period.
