SAN FRANCISCO - Getaround Inc. (NYSE: GETR), a carsharing marketplace, announced today it has secured a $20 million capital commitment from Mudrick Capital Management L.P. The investment will be made available on or before July 26, 2024, as part of an existing debt facility agreement with Mudrick Capital.
Furthermore, Mudrick Capital has expressed its intent to convert at least $10 million of its convertible debt into Getaround shares at a revised price of $0.25 per share. This conversion is scheduled to occur within 45 days following Getaround's Annual Stockholder Meeting on July 31, 2024, and is contingent on shareholder approval.
Eduardo Iniguez, CEO of Getaround, expressed appreciation for Mudrick Capital's ongoing support and their conversion plan, viewing it as a reaffirmation of confidence in the company's trajectory towards profitability.
Getaround, which began operations in 2011, offers a peer-to-peer carsharing platform that allows users to rent cars from a community of local hosts. The service is designed to provide a seamless and contactless rental experience, facilitated by its proprietary Getaround Connect® technology. The company operates in over 1,000 cities across 8 countries and advocates for environmental sustainability and economic opportunity through its marketplace.
The company's forward-looking statements, including projections about additional funding and its path to profitability, are subject to various risks and uncertainties. These include potential dilution from future financings and other factors detailed in the company's SEC filings, such as their Annual Report on Form 10-K for the year ended December 31, 2023.
Getaround's announcement is based on a press release statement, which includes plans for additional capital and debt conversion but also cautions about the inherent risks of forward-looking statements. The company and Mudrick Capital have yet to finalize the terms of the shareholder approval for the conversion price amendment.
In other recent news, Getaround, a key player in the connected carsharing market, has secured an additional $50 million in capital through the expansion of its debt facility with Mudrick Capital Management.
This move is a part of Getaround's strategic efforts to revamp its business operations, following a leadership transition and operational restructuring earlier in the year. CEO Eduardo Iniguez has expressed confidence in these changes, highlighting the company's commitment to its users and society's evolving mobility needs.
Jason Mudrick, chief investment officer of Mudrick Capital Management and a Getaround board member, has also voiced his increased confidence in the company's direction and its ability to achieve strategic growth and profitability objectives.
These recent developments underscore Getaround's strategic focus on establishing a sustainable business model and addressing the evolving needs of the carsharing market.
InvestingPro Insights
As Getaround Inc. (NYSE: GETR) navigates its path towards profitability with the support of Mudrick Capital, the company's financial status and market performance provide a mixed picture.
With a market capitalization of $12.76 million, Getaround shows a significant presence in the peer-to-peer carsharing market. The company's revenue growth is robust, with an impressive 33.92% growth over the last twelve months as of Q1 2024, and an even higher quarterly revenue growth rate of 48.92% for Q1 2024.
However, the company's financial health is a concern, as reflected in two critical InvestingPro Tips. Getaround operates with a substantial debt burden and may have trouble making interest payments on its debt. This is particularly relevant given the recent capital commitment and potential debt-to-equity conversion with Mudrick Capital. Moreover, the company's gross profit margins are remarkable, standing at 90.58% for the last twelve months as of Q1 2024, highlighting its ability to maintain high profitability on its services.
Investors should note that analysts do not anticipate Getaround will be profitable this year, which is consistent with the operating income margin of -124.77% for the last twelve months as of Q1 2024. Moreover, the company's stock is trading near its 52-week low, with a price 19.71% of its 52-week high, indicating that the stock has taken a significant hit in the market.
To gain a deeper understanding of Getaround's financial health and market potential, interested investors can explore additional InvestingPro Tips. There are 14 additional tips available on InvestingPro, which can be accessed at https://www.investing.com/pro/GETR. For those looking to subscribe, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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