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Why Mode Global Shares Plunged 41.2% After CEO’s Resignation

Simon Mugo trader
Updated 19 Jan 2023

The Mode Global Holdings PLC (LON: MODE) share price plunged 41.2% after revealing efforts to raise money to keep funding its operations had failed due to the significant challenges facing the cryptocurrency industry.

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YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


The fintech company had built a proprietary payments solution using open banking to sidestep the network fees charged by payments processors and had created a system where the end-to-end relationship between customers and businesses was managed exclusively by Mode.

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YOUR CAPITAL IS AT RISK. 68% OF RETAIL CFD ACCOUNTS LOSE MONEY

However, today’s announcement indicates that the company is about to declare insolvency since it has run out of cash to continue paying for its daily operations. Furthermore, the resignation of its CEO Rita Liu has only worsened the situation. 

Mode Global also announced that non-executive director David Shrier had tendered his resignation, which the board accepted. Jonathan Rowland has taken over Rita Liu’s role as Executive Chairman to keep leading the company. 

On the bright side, Mode reassured its customers that all their fiat and crypto deposits were safe and had not placed any restrictions on customer withdrawals. Mode’s predicament is not unique, as many crypto companies have faced a cash crunch recently as funding for the sector dried up following a slew of bankruptcies in the industry. 

Mode has been trying to raise additional cash since its last capital on 13 July 2022, when it raised $2,000,000 via a convertible loan note issue. However, despite not securing any additional funds, Mode kept implementing its growth strategy and recently got approval from the FCA to add new tokens to its platform. 

Given the crypto industry’s harsh operating environment, the company’s dire predicament results from factors beyond its control. However, there is hope that the industry will recover following the recent Bitcoin rally, but it is too early to tell. 

Meanwhile, some Mode investors took the opportunity to offload their shares today as the company might be unable to keep operating as a going concern if it does not raise money quickly. 

*This is not investment advice. 

Mode Global share price. 

The Mode Global share price plunged 41.2% to trade at 1.47p, from Wednesday’s closing price of 2.50p.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading