Toronto-based E Automotive (E Inc.), an online vehicle auction marketplace, is delisting its shares from the Toronto Stock Exchange (TSX).
According to E Inc., it decided to delist from the TSX because maintaining the listing doesn’t offer “substantial benefits” to the company and its shareholders. E Inc. said it expects to delist its shares from the TSX on or about May 24, at which point there will be no public market to trade the company’s shares.
In an effort to decrease expenses, E Inc. completed a restructuring plan in Q4 2022.
Among a number of considerations, E Inc cited “extremely limited trading volumes” and its small public float in its decision to delist. The startup said approximately 10 percent of its shares are held by investors who are not members of management, directors, or employees of the E Inc.
E Inc. said that limited trading volumes and a small public float can “limit future institutional investment opportunities and can drive volatility in the price of the company’s shares unrelated to the company’s performance.” Should market conditions and company performance improve however, E Inc. said it may seek to list its shares again with investment from institutional investors.
E Inc. went public on the TSX in Q4 2021 where it generated $135.7 million CAD in gross proceeds. The company said on Tuesday that institutional investors comprised over 90 percent of the IPO, however the majority of such investors sold their positions before E Inc. had even reported a single quarter as economic and market conditions deteriorated. E Inc. added that 95 percent of institutional investors that acquired shares on its IPO have sold their positions.
E Inc. operates a digital platform to optimize the processes of buying, selling, and managing inventory for automotive dealers and consumers. It was incorporated in 2017, founded by Ryan O’Connor, who has since created real estate auction marketplace Unreserved.
In the face of volatility in the broader market, E Inc. has not been exempt from the obstacles that online vehicle retailers and other tech companies have experienced in the last year such as tight inventory conditions and a fundraising crunch.
E Inc. CEO and president Jason McClenahan, who was appointed to his role in 2019, said that the company saw depressed conversion rates in the fourth quarter last year, which was also the seasonally lowest quarter of the year.
In an effort to decrease expenses, E Inc. completed a restructuring plan in Q4 2022 where it built “digitally around its physical auction locations in fewer regions in the [United States].” E Inc. confirmed to BetaKit in December 2022 that it made layoffs.
E Inc. also reported that the number of vehicles transacted through its platform declined by 4 percent in Q4 2022, though it also increased by 18 percent when compared year-over-year. The change in the Q4 2022 period, according to E Inc., is primarily due to current supply and demand dynamics where used vehicle pricing remains high due to low inventory, which adversely impacts the volume of transactions in the wholesale sector.
Featured image courtesy E Inc.