WM Technology Inc (NASDAQ: MAPS), operator of the multi-purpose Weedmaps cannabis platform, was up by 28 per cent Wednesday morning after news broke that its founders were considering taking the company private.
Doug Francis and Justin Hartfield mailed a letter to shareholders on Tuesday outlining the proposal, which was acquired by MjBizDaily. They want to buy up all the shares at US$1.70 apiece. This number represents a 39 per cent premium on the stock’s closing price yesterday.
“Our proposal presents the company’s public stockholders with a value-maximizing alternative to WM’s current strategic trajectory and an opportunity to de-risk their investment,” Francis and Hartfield stated in the letter.
WM Technology has been on a steady decline since its IPO in mid-2021. As pointed out by researchers from MjBizDaily, the Weedmaps platform’s parent company has lost about US$2.3 billion in enterprise value since that time.
This proposition by the two founders still requires approval from the board of directors and shareholders. They aim to have the de-listing completed within the next month.
Weedmaps was launched in 2008 to provide a platform for patients with medical cannabis subscriptions to find dispensaries and doctors. Its scope expanded in the following years as certain American states legalized adult-use bud, and eventually Canada. Weedmaps has a considerable presence in Spain too where it serves as a listing catalogue for local weed consumption clubs.
Some have referred to it as the “Yelp Inc (NYSE: YELP) for cannabis.” It functions as a hub for product and service reviews, cannabis dispensary listings, educational marijuana content and cannabis culture.
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Law firms launch investigations after SEC fines WM US$1.5M
Multiple legal firms have been investigating WM Technology for lying to stakeholders.
This development follows the United States Securities and Exchange Commission fining WM US$1.5 million for misleading metrics before its IPO in June 2021. This occurred in September.
An investor class action lawsuit was then filed the following month after the SEC’s legal undertaking, which is currently ongoing.
New York’s shareholder-specialized legal operator, Bragar Eagel & Squire, P.C., said this week that it was looking into these allegations that the company’s board of directors had been lying about “severely inflated” user metrics.
“Our investigation concerns whether the board of directors of WM Technology have breached their fiduciary duties to the company,” the firm said in a statement Tuesday.
Faruqi & Faruqi, LLP and Bronstein, Gewirtz & Grossman, LLC are also looking into these accusations.
Investors who were impacted by WM’s misleading information may want to try and recover financial losses.
rowan@mugglehead.com
