Spire Global (SPIR -3.60%) stock crashed 49.7% through 11:11 a.m. ET Wednesday, and a lot of investors are wondering why right now. What the heck is going on? There's neither a single press release about this nor anything on the company's website to explain the disaster.
Lucky for you, I've found the answer.
In a Securities and Exchange Commission 8-k filing last night, Spire Global warned investors about a major risk to their investment. Remember how, back in November, Spire Global said it was selling its maritime ship-tracking business to Belgian analytics company Kpler? Remember that Spire was counting on Kpler to pay $241 million for the business and that Spire planned to use that money to pay off all its debts?
Yeah, that isn't happening anymore.
NYSE: SPIR
Key Data Points
Spire Global's no good, very bad news
As Spire explains, Kpler agreed to close its purchase of the maritime business in the first quarter of 2025. "All conditions to closing [now] have been satisfied or could be satisfied," says Spire. Yet, for some reason, Kpler "has failed to consummate the closing" and appears to be trying to get out of the deal.
Spire is suing in Delaware Court to force Kpler to proceed with its purchase, but "there is no assurance" it will succeed. Worse news for Spire, the company had relied upon this sale going through to pay off its outstanding debts. Without the promised cash from Kpler, Spire lacks the funds to do that.
What does this mean for Spire Global stock?
Spire warns that it's already in breach of its loan obligations and that its lender, Blue Torch Finance LLC, has the right to accelerate the due date for its payments and demand payment in full -- which Spire cannot currently afford. As a result, Spire may be forced to seek new loans or stock sales to pay off its old loans.
On top of all this bad news, the company is busy restating its earnings and has had to issue a going concern warning, implying that it may go bankrupt within a year if Kpler doesn't pay up.
