The Swvl Holdings Corp (NASDAQ: SWVL) has been on a roll during the first week of January, rising about 186%. The rally has left many investors wondering whether it is sustainable and the true reason fueling the rally.
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For those unfamiliar with the company, Swvl is a mass mobility startup seeking to transform many developing countries' public transport sectors. The company operates in multiple countries, including Kenya, Egypt, and Pakistan, with its headquarters in Dubai.
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The primary driver behind the recent rally in Swvl stock was the company’s announcement on December 30, 2022, that it had begun a strategic review to explore and evaluate potential strategic alternatives that may be available to the company.
Swvl has formed a special committee of independent board directors to spearhead the strategic review, given the massive decline in its share price that has massively eroded shareholder value and made it difficult for the company to raise capital.
Investors were pleased with the move, as evidenced by the rally in SWVL shares, given that some of the alternatives being explored by the company include a merger or other business combination, corporate sale, strategic investment, new debt or equity financings, a sale of all or a portion of the company's assets or other significant transaction.
The company did not set a deadline regarding when the strategic review would end, demonstrating its commitment to turning around its operations. The firm said it would not comment on the process until there was some progress.
Swvl expressed its commitment to exploring all available options fairly to maximise shareholder value. However, it warned that there were no guarantees that the review would result in any transaction.
The company has been doing well after its operations in its top 5 markets, including Kenya, Egypt, Germany, Turkey and Jordan, turned Adjusted EBITDA positive or breakeven in August 2022.
However, its share price decline has eroded investor confidence in the company leading to its current predicament. Still, the tide seems to have turned for SWVL’s stock, given its impressive start to the year.
*This is not investment advice.
Swvl stock price.
The Swvl stock price was trading 42.53% up at $0.43, rising from Friday’s closing price of $0.30.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.