Technology stock

Enjoy Technology stock explodes after bankruptcy filing

Yahoo Finance Live anchors discuss how Enjoy Technology shares are trading after the bankruptcy filing.

Video transcript

BRIAN SOZZI: And last but not least here– and that’s a name that I really pushed, Brad. I pushed to have it in this section. This is Enjoy Technologies. This is a ticker that has been hot, hot, hot on our platform for the past 48 hours. It is now a $0.50 stock. And that’s basically hot because Enjoy filed for bankruptcy last week.

And it’s a company founded by former Apple retailer Ron Johnson. Went public at a $1.1 billion valuation. Now, a bankrupt company is seeking a bailout or takeover, should I say, of Asurion at some point this week. That’s according to the FT earlier in the week on this one. But, you know, I wanted to mention this almost like a real-time Yahoo.

For anyone trying or trading a name like Enjoy, a bankrupt company is the action I typically saw when Sears went bankrupt many years ago. You’ve seen a lot of speculation about Sears despite the stock, despite the company going bankrupt and the stock still trading for a while. Look, Enjoy, realistically, will probably be dropped from the list.

And you see, I think, just a lot of speculation about that name. You don’t want to get caught up in the speculation of a company that’s essentially out of business here. So be very careful. But, again, this is one of the most popular tickers on our platform right now.

Brad Smith: Yeah, and I think it’s fair to add here that Enjoy is not Hertz. When we saw the bankruptcy proceedings of Hertz, it was a different class of business, a different style of business as well. And one that you assumed, when the trip came back, that Hertz would be able to get out of this bankruptcy somehow, and that was a procedure for them to somehow protect themselves just to cross to the other side. Enjoy, much different.

And for what we’ve seen in the SPAC market for some of the companies that may have been part of a de-SPAC, there’s been a weakness in the water. And there are definitely holes in their flotation devices in this particular bear market that we’ve been watching. And so for a lot of SPAC names that have seen the wind fall, it’s a broader question of what kind of business – if they have to survive a recession, what kind of business will they look like? ‘other side? And on which clientele too?

BRIAN SOZZI: Yeah, how I love your Hertz comparison, Brad. I think that’s fair. At the end of the day, Hertz is a real business. Decades of activity. And that just needed to go through a more traditional bankruptcy restructuring process. And then the business could emerge with less debt and still be a real business.

There were always questions around the Enjoy, Brad business model. I remember talking to the company when it went public. And you always have the feeling, well, can they make this model work? And if they do, how big is that market? And, again, this is all playing out right now. Enjoy is bankrupt. So, again, if you trade this name, be very careful. At some point, it will be… a delisted stock.