Skift Travel News Blog

Sonder announced Tuesday that its 1-for-20 reverse stock split would become legally effective after market close Wednesday, and that its shares would start trading on that basis Thursday morning.

The move is geared to get the stock trading at more than $1 per share in compliance with Nasdaq rules.

“As of the Effective Time, every 20 shares of the Company’s issued and outstanding common stock and every 20 shares of its issued and outstanding special voting common stock will be combined into one issued and outstanding share of common stock or one issued and outstanding share of special voting common stock, respectively,” Sonder announced. “The total number of authorized shares of common stock will be reduced from 400,000,000 to 20,000,000, and the total number of authorized shares of special voting common stock will be reduced from 40,000,000 to 2,000,000.”

Sonder closed trading on Tuesday at $0.34 per share.

The reverse stock split doesn’t change Sonder’s market cap, which was $74.8 million at market close on Tuesday.

After receiving a notice from Nasdaq in April that its shares could be delisted because their price had dipped below $1 per share for 30 trading days in a row, Sonder announced in July would ask shareholders to approve a reverse stock split, which they did on Friday in a special meeting.

Sonder is among a bevy of SPACS, which saw its share prices tumble, some below $1 per share, after they went public.

The majority of Sonder’s listings are for short-term rentals, but hotel rooms are a growing portion of its portfolio.

It has an advantage in places like New York City, which just clamped down on host registrations for short-term rentals, because Sonder has many hotel licenses, and these are legal.

Property manager Vacasa announced its intent to conduct a one-for-20 reverse stock split that’s geared to get its share price higher than $1 per share and therefore to be continued to trade on Nasdaq.

A vacation rental that Vacasa manages. Source: Vacasa

Its shares were trading for $0.48 midday on Friday.

The reverse stock split, authorized by the Vacasa board of directors September 1, would go into effect before midnight October 2, the company said. Vacasa’s split-adjusted shares would start trading on the stock market the next day.

Several companies, including Sonder, which went public via SPACs and have seen their share prices dip below $1 have similarly announced reverse stock splits.

Sonder shareholders will vote in a special meeting September 15 on whether to give the board approval to carry out a reverse stock split — with the split ratio subject to the board’s discretion.

The idea behind the move is to keep Sonder, which went public in a special purpose acquisition company deal on January 19 2022, trading on Nasdaq after getting notified that the run might end because the share price was trading below $1 for an extended duration.

An affirmative vote seems like a done deal. The board will decide whether the split will be “1-for-10, 1-for-15, 1-for-20 or 1-for-25” etc., Sonder said in a U.S. Securities and Exchange Commission filing Wednesday.

The split will in itself will not impact the company’s market cap, which stood at a mere $125 million after Wednesday’s close.

Atreides controls 9.2% of the vote, Fidelity 7.3%, Spark Capital 6.7%, and CEO Francis Davidson 5.3%.

Plenty of SPACs had their share prices plummet after their market debuts in the last couple of years, as stock markets tired of speedy growth with accompanying large losse,s and looked for profitability. Sonder is not expected to be profitable for full year 2023.

Despite a couple of rounds of layoffs since the middle of last year, Sonder hired 97 new, non-executive employees, and gave them all stocks options, as is the company’s practice.

A Sonder apartment in Rome, Italy. Source: Sonder

These were mostly city positions and customer service jobs, and were a combination of back-filling roles and new ones because of property and building openings, a spokesperson said.

Sonder’s careers page lists around 75 open positions from housekeeping leads to front desk hospitality agents and a vice president of design, development and openings in a variety of global destinations.

In its Tuesday announcement, the hospitality company said it granted a total of 327,600 shares of stock options to the 97 new employees as a whole.

Sonder’s share price at the Tuesday close was 58 cents, down 3.69 percent for the day.

Sonder, the property management company that went public through a blank check merger, or SPAC, found someone to replace its outgoing chief financial officer with the help of 2.7 million stock options as an incentive.

It is challenging to recruit a chief financial officer when your stock was trading at $0.90 per share, the exercise price on the date of the grant, March 16. SOND closed Monday at $0.81 with a paltry $179 million valuation.

Bourgault most recently served as chief financial officer at online diamond retailer and privately held Blue Nile for a year-and-a-half until October 2022. Before Blue Nile, he served in various financial positions at Expedia Group for 17 years, including departing as chief financial officer of Expedia Portfolio and Retail in March 2020.

Some 25 percent of the new chief financial officer’s stock option grant will vest on the first anniversary of his hiring. His annual salary is $495,000.

Bourgault can earn a fortune if he can help steer Sonder into share price territory that is well above flirting with a delisting edict.

He replaced Sanjay Banker, who served as Sonder’s chief financial officer and president until December 2022. Bourgault does not have the title of president.

In 2021, Banker earned a $465,000 salary and had nearly 46,000 option awards — compared with Bourgault’s roughly 2.7 million.

Airbnb reduced its recruiting staff by 30 percent — affecting perhaps a couple of dozen jobs — even as the company plans on increasing its overall workforce in 2023.

A spokesperson told Bloomberg that the layoffs came this week to align the size of Airbnb’s recruiting staff with the scale of projected hiring this year.

The firings impacted 0.4 percent of Airbnb’s roughly 6,800 workers, meaning there were roughly 27 job cuts.

In 2023, Airbnb expects to pump up its workforce 2 to 4 percent, compared with an 11 percent jump in 2022, according to Bloomberg.

Airbnb lopped off 25 percent of its workforce in early 2020 as the pandemic briefly shut down the vast majority of its business.

Under different circumstances, property manager Sonder announced this week it laid off 14 percent of its corporate staff, a move that reflect the uncertain state of the company, the company said.

Hospitality company Sonder Holdings said that it has been investigating a data breach involving unauthorized access to some guest records.

The company believes that guest records created prior to Oct. 1, 2021 were involved in this incident.

The information that has been accessed includes username and encrypted password, credit card information. Additionally, Sonder believes that copies of government-issued identification such as driver’s licenses or passports may have been accessed for some guests.

Sonder learned of unauthorized access to one of its systems that included certain guest records on November 14.

Following the discovery, Sonder said it has engaged security and forensic specialists to assist in its investigation and assured that its business remains fully operational.

The company has also launched a dedicated landing page for guests concerning the incident.

Sonder said it will be making services available to guests involved in the data breach, such as credit monitoring, identity protection, or monitoring of website where personal information may be shared.

The company also said it has contacted law enforcement and is notifying appropriate regulatory bodies.

In 2018, Marriott International reported a massive four-year data security breach.

A startup whose founding team includes two former Uber staffers has secured $5 million to grow its vacation and short-term rental platform in Mexico.

Naya Homes began operations in Puerto Vallarta in August, and with the extra cash will launch in Mexico City, with a 15-unit building in Polanco in September.

It specializes in vacation and short-term rental management, and it works with both real estate investors and homeowners.

The company claims that relative to Latin America incumbents that execute master leases on larger buildings, Naya Homes is an asset-light operator that maximizes profitability for all types of properties, from individual apartments to vacation villas.

Despegar, meanwhile, is bolstering its vacation rentals portfolio in Latin America, following the closing of a 51 percent stake in channel manager Stays. Lodging startup Casai, which is based in Mexico City, is also steeping up its presence.

The funding round was led by Boston and New York City-based Flybridge Capital Partners with participation from Primary Venture Partners, Clocktower Technology Ventures, K50 Ventures, Carao Ventures, Trip Ventures, Colibri Equity Ventures, Derive Ventures, in addition to several former executives from Uber’s Latin America team.

“We believe Naya can deliver incredible value to numerous stakeholders across the residential real estate value chain at scale,” said Jeff Bussgang, partner at Flybridge Capital Partners, in a statement. “Naya’s founding team is incredibly well-positioned, having on-the-ground experience managing operationally intensive businesses in LATAM, ranging from Uber to Sonder.”

The funding follows a $600,000 pre-seed led by Primary Venture Partners in March 2022.

In a further sign of its push into business travel, Sonder has added Michelle Frymire, the former CEO of corporate travel agency CWT, to its board of directors.

The next-generation hospitality company this month also announced it has a chain code, SS, in the Sabre and Amadeus global distribution systems, and earlier this year expanded its sales team to offer corporations negotiated rates and attract groups.

However, months after that expansion it restructured its operations, cutting 21 percent of corporate roles and seven percent of frontline roles, including its chief technology officer.

Frymire has experience on this front too, as during her 12 months at CWT she oversaw its financial restructuring and eventual exit from bankruptcy.

Manon Brouillette, executive vice president and CEO of Verizon Consumer Group, is stepping down from Sonder’s board to focus on her current job at Verizon, the company said.

Sonder has been trying to up its footprint in corporate travel, announced that it now has a chain code, SS, in the Sabre and Amadeus global distribution systems.

When travel agents are looking to book corporate clients in Sonder properties, having that chain code makes it easier for them to search and find them, Sonder said Wednesday.

Sonder said it obtained the chain code through a partnership with RateGain, which uses a connectivity switch solution to process electronic hotel bookings.

Sonder, a property manager of short-term rentals and hotels, said in its most recent earnings call last month that it had nearly 400 corporate accounts, up from around 250 at the end of March.