Used-car retailer Shift Technologies plans to file for Chapter 11 bankruptcy protection, ceases operations

Shift Technologies Inc., an online used-vehicle retailer with headquarters and a physical presence on the West Coast, said Friday it intends to file for Chapter 11 bankruptcy protection.

In a news release published Friday, the company said it will "utilize cash on hand and cash generated by the liquidation of inventory through wholesale channels to provide the necessary liquidity" to support a wind-down and eventual closure during the Chapter 11 process.

The announcement comes after Shift Technologies disclosed earlier this year its board of directors would review "strategic alternatives" for the business, which has recorded consistent net losses amid volatile used-vehicle market conditions.

San Francisco-based Shift Technologies said it closed its two remaining physical locations in Oakland, Calif., and Pomona, Calif. The vehicle listings portion of its website also was offline Friday.

In a statement included in the news release, Shift Technologies CEO Ayman Moussa said the intent to file is "not the outcome we had expected or hoped to achieve."

"This decision follows months of trying to raise capital and restructure the balance sheet to allow the Company to operate unencumbered in this challenging environment," Moussa said. "Ultimately, the extensive efforts of our senior leadership team and advisors were not successful. We want to thank all our dedicated employees, customers, and vendors who have supported us over the years."

Shift Technologies was urgently seeking more capital to continue business, company leaders told analysts and investors during a second-quarter earnings call in August.

Keller Benvenutti Kim, a corporate bankruptcy law firm in San Francisco, is acting as Shift Technologies' legal counsel, according to the news release. Consulting firm AlixPartners is acting as the company's financial adviser, the release said.

Shift reported a second-quarter net loss of $25.8 million in the three months ended June 30, slimmer than its loss of $52.2 million for the year-earlier period. Total revenue plunged 79 percent year over year to $47.3 million.

Shares of Shift Technologies Inc. plunged 85 percent to $0.29 in after-hours trading Friday.

Shift went public by merging with a blank-check company, Insurance Acquisition Corp., in 2020. It’s just the latest in a growing list of former special purpose acquisition companies to founders as the blank-check boom fizzles.

Bloomberg contributed to this report.