Shares in Payfare fell by more than 75% after the Canadian earned wage access firm announced a strategic review following the loss of its largest client, DoorDash.
Last week, Payfare disclosed that the food delivery app DoorDash would not be renewing its contract for the DasherDirect card program when it expires early next year. This contract represented a “substantial proportion” of Payfare’s total revenue, leading the Toronto-based company to withdraw its previously issued financial guidance for 2024 regarding revenue and earnings.
As a result, Payfare’s stock price dropped from over US$6 per share to approximately US$1.50. In light of this situation, the company’s board has engaged outside legal and financial advisors to conduct a “comprehensive and thorough strategic review process” aimed at exploring various options to enhance value.
The firm highlights long-term renewals with Uber and Lyft secured this year, along with over $100 million in cash, cash equivalents, and guaranteed investment certificates. The review will consider strategic partnerships, investments, potential acquisitions, and options for a sale, merger, or other business combinations.