The China-based auto-backed financing solutions provider, Weidai Ltd. (WEI) stock has been trending actively since the company announced preliminary 2021 results. Largely on a bullish roll, since the earnings were announced on March 28, 2022, WEI has lost a fair share to corrections and profit booking as well. The roller-coaster ride while peaking at gains on the earnings, has succumbed to corrections more than once now. The latest corrections event follows the stock’s mammoth gains on Friday. After shooting up by 28.83% during intraday trading, the stock declined under corrections in the after hours. Thus, the regular session’s closing price of $1.43 went down to $1.33 in the after-market trading. The stock reported a downward move of nearly 7% in the after-hours on Friday.
What Does WEI Expect for the 2021 Report?
Based on the preliminary and unaudited analysis of its financials, the company expects to bring in a revenue of RMB698-RMB708 million for fiscal 2021.
With losses from operations ranging between RMB744-RMB754 million for the year, the net loss is expected to be RMB1,144-RMB1,154 million.
Moreover, the company anticipates that the year-end cash and cash equivalents would be around RMB225-RMB235 million.
Peer-to-Peer Lending Business Update
Having commenced the exit process of its peer-to-peer lending business in 2020, WEI has so far completed most steps in the process. The company was able to repay all outstanding net principal balances to investors in July 2021. Currently, it is working with government authorities for completing the exit process.
NYSE Listing Requirements & WEI Ratio Change
Last year, the company fell below NYSE’s price criteria for ADSs’ continued listing standard. After evaluating its options and plans for regaining compliance with NYSE, WEI recently effected a stock split. Similar to the 1-for-3 reverse split, initially the ADSs ratio change of 1 ADSs representing 3 Class A ordinary shares was announced to commence on January 26, 2022. Seemingly, the company found a ratio change similar to the 1-for-5 reverse split much more effective, thus, nullifying the 1:3 change, WEI effected a 1:5 change instead.
Consequently, the company received an NYSE notification on February 28, to declare the company’s compliance with NYSE listing standards. Hence, the company has regained compliance with NYSE in regard to its ADSs price.
How Does the Future Look?
Having lost over 80% last year, WEI has continued its bearish sentiment into 2022 as well with a decline of 61.87% so far. Unless the company takes some drastic steps and improvises, the long-term price is deemed to be in the red. On the other hand, the intermediate-term price shows green.