Helbiz had ICO in 2018.
Helbiz coin holders lost their money.
Now Helbiz listed on NASDAQ.
Helbiz coin investors filed a class-action case against Helbiz on June 19, 2020.

The Helbiz coin is a security - court desicion: on January 22, 2021

Helbiz may face a Federal Securities Fraud case
23.08.21

The big bluff of Palella, the Italian who brought the scooters to the stock exchange

This is translated article of Italian mass-media Domani.

- Many Italian media believed in his propaganda and told about Salvatore Palella as if he were Elon Musk from Acireale.

- His Helbiz is the first Nasdaq-listed micro-mobility company, but financial documents and balance sheets tell another story. Built thanks to the capital of unknown origin.

- On the occasion of the listing, Helbiz collected much less than expected. Palella promised a turnover of 80 million in 2021. However, in the first quarter, it was 1.2 million dollars, with a net loss of over 15 million.

Salvatore Palella did it: the self-proclaimed king of scooters has finally managed to list his Helbiz on the American Nasdaq stock exchange, through a merger with Spac Greenvision Acquisition. The first landing on the American market of a sharing micro-mobility company. The rivers of ink and bits in the local media praised the Sicilian entrepreneur as a new Elon Musk. But the documents filed with the SEC and Helbiz's company financial statements tell another story and do not erase the doubts about a career of many shadows and few lights, and built more on self-marketing than on business successes.

FROM ACIREALE TO NEW YORK

The career of the 34-year-old entrepreneur born in Acireale and domiciled in New York has followed a path that is anything but linear. Palella comes from a family of fruit and vegetable traders. In 2010, at the age of 23, he founded Witamine company, that the family Palella ​​sells - a small business of orange juice distributors for 90 thousand euros; in 2012, Witamine took the books to court after a seizure of assets, which was later revoked, linked to the company's involvement in an anti-mafia operation of the Milan Dia.

Immediately after Witamine, in 2013 Palella offered to buy the football team from his hometown Acireale and promised the arrival of (former) champions such as David Suazo. For what money? Mystery. But the football adventure ends after six months, amid the accusations of the players who were not paid and the anger of the son of a mafia boss involved in the negotiations for the purchase and sale of the team's brand.

All that Palella does not tell about his past

THE ESCAPE OF INVESTORS

After a few years, we find Palella in the US, where he is very busy, up to the landing at the Nasdaq in Helbiz. Today the company is mainly active in shared mobility, a business that started just two years ago, and its scooters are found on the streets of cities like Rome, Milan, and Turin. The Nasdaq debut took place on Friday, 13 August, with the ritual bell ceremony. Despite the many celebrations at home, things did not go entirely smoothly: almost all of Greenvision's investors fled the prospect of merging with Helbiz.

The SPAC mechanism used by Palella is all the rage on Wall Street and involves the creation of listed “financial boxes” that raise funds from investors; such boxes, like Greenvision, seek out companies looking for a shortcut to the stock market. When the marriage goes through, companies like Helbiz earn the listing and the capital brought in by investors, while those who invested resell the securities, if all goes well, with a capital gain.

In the case of the Palella company, however, out of a total of 59 million dollars of capital initially subscribed by the Greenvision shareholders, over 94 percent exercised the right of withdrawal and had the shares repaid before the merger. Instead of the expected 50 million dollars, Helbiz thus raised just over three million, which would not even be enough to cover the 6.5 million costs of the listing.

If Helbiz did not go underwater already on the first day, it is thanks to an injection of funds by a group of private investors called Pipe (private investment in public equity). But even here, things did not go as hoped: "at least 30 million dollars" had to arrive from the Pipe. Only 21.5 arrived, net of the repayment of a previous loan.

There is another problem: the flight of Greenvision investors means that Helbiz's free float, the number of shares that can be traded on the market, does not reach the level required for listing on the Nasdaq; the stock exchange, therefore, published the “delisting letter” which provides for the cancellation of Helbiz from the list. The company states that the letter is only a formal step and that cancellation will be avoided by publicly registering the shares subscribed in the aforementioned private placement.

FROM ACIREALE TO NEW YORK

The career of the 34-year-old entrepreneur born in Acireale and domiciled in New York has followed a path that is anything but linear. Palella comes from a family of fruit and vegetable traders. In 2010, at the age of 23, he founded Witamine company, that the family Palella ​​sells - a small business of orange juice distributors for 90 thousand euros; in 2012, Witamine took the books to court after a seizure of assets, which was later revoked, linked to the company's involvement in an anti-mafia operation of the Milan Dia.

Immediately after Witamine, in 2013 Palella offered to buy the football team from his hometown Acireale and promised the arrival of (former) champions such as David Suazo. For what money? Mystery. But the football adventure ends after six months, amid the accusations of the players who were not paid and the anger of the son of a mafia boss involved in the negotiations for the purchase and sale of the team's brand.

All that Palella does not tell about his past

THE ORIGINS OF HELBIZ

According to reports from the financial site Crunchbase, Helbiz was founded in 2015, the same year in which Palella also founded the SP1 investment fund. For Helbiz, there is an initial investment of $ 1.3 million in October 2015 and a subsequent investment of $ 1.1 million in February 2017. Where did the funds come from? The SP1 fund was closed in December 2018. Also in 2018, Palella launched HelbizCoin, a Bitcoin-style cryptocurrency that was to be the basis for a car sharing service between individuals based on blockchain technology; the placement of HelbizCoin in Singapore yielded over 30 million dollars.

The promised car-sharing service never started, the value of the HelbizCoins was zeroed shortly after the listing and angry investors sued Palella in the US - a lawsuit rejected by the American judge for the jurisdiction, but the Plaintiffs filed the appeal.

As co-founder of HelbizCoin appears Armando Calvosa, from Cosenza, still referred to as Helbiz's "advisor" in a profile on LinkedIn. Calvosa has various LinkedIn profiles, one of which indicates him as the owner of the agency I Viaggi di Cicci, also in Cosenza, the latter's website is no longer updated since 2017 and in 2017 Calvosa was the founding partner and director of Digital innovation and Crypto Ltd, a company domiciled in London. Calvosa resigned from the role of administrator in June of this year.

Palella launched into the shared scooter business in 2019 and from this year Helbiz has diversified with MiMoto, an Italian electric moped rental company.

THE LOVE STORY WITH THE MEDIA

From a media point of view, Palella's rise as a public figure is no different from that of other phenomena, otherwise totally different, such as the pianist Giovanni Allevi: a character is "built" almost out of nothing with well-chosen marketing ideas. In the case of Allevi, a concert at the Blue Note in New York and a new teenage hair at almost 40 years of age; for Palella, the idea of ​​serial entrepreneurship, a scent of American finance, and the charm of the boy from Sicily who breaks through in New York, complete with an American wife, a handsome ex-model. In the case of the Palella effect on the media, perhaps there is also an unconscious desire of the public to really have some entrepreneur like Elon Musk in Italy after years of technological decline.

The way in which the information spread and then became viral thanks to copy and paste is also interesting. Interviews and laudatory articles on Palella have been filled for years with biographical data and events that are sometimes false but almost always told by the journalist and not directly by Palella. Il Sole 24 Ore wrote, for example that "Palella at 19 founded his first company Witamine, sold 5 years later for 50 million dollars". Who knows who has provided this information?

INCREASE LOSSES AND SALARY

With the Nasdaq listing, spreading false information has become riskier. Palella's official biography - which contained at least one piece of information that was certainly incorrect - thus disappeared from Helbiz's website, and even his LinkedIn profile, almost mandatory for a self-respecting manager, was deleted.

Helbiz lost $ 7.7 million in 2019, $ 24.5 million last year (on a consolidated turnover of $ 4.4 million), and $ 15 million in the first quarter of 2021 alone, for a total of over $ 47 million (about 40 million euros). The losses are not unusual for a startup, but they don't weigh on Palella that much.

The Italian-American entrepreneur is the largest shareholder with a share of just under 50 percent; as CEO, he received $ 470,000 in compensation from Helbiz in 2019 and $ 1,445 million last year; after all, a third of Helbiz's 4.4 million revenues in 2020 ended up directly in Palella's pockets, not counting the stock options but including $ 210,000 for "accommodation costs".

Palella has used the company so far as a checking account. In the listing prospectus, Helbiz states: «Over the past two years, we have lent funds to Salvatore Palella without interest and a fixed repayment date. In February 2020, Mr. Palella repaid us one million dollars of these funds in cash. During the remainder of 2020, Mr. Palella repaid the outstanding balance of these funds, totaling $ 985,000, by canceling his salary and a bonus due to Mr. Palella on the repayment date. The loan and repayment of these funds were not made through formal agreements'. This year, however, Palella granted Helbiz a $ 2 million loan, again without interest.

Helbiz's net debt as of March 31 was over $ 21 million. In the last two years, the main financier has been Dario Belletti's Finbeauty, which has invested in Helbiz since July 2019 for a total of 11.5 million dollars, almost 10 million euros, of which 4 million after March 31. Belletti, a cosmetics entrepreneur, is the second-largest shareholder in Helbiz after the merger, with a stake of more than 10 per cent.

Among Helbiz's debts, there are also two guaranteed by the Italian state. In November 2020 and March 2021, in fact, Helbiz obtained from the Central Guarantee Fund for SMEs the guarantee on two loans for a total of 5.5 million euros.

THE UNKNOWN FUTURE

What are the prospects for the scooter business? Palella promised six months ago that the turnover would jump from 4 million dollars in 2020 to 80 in 2021. In the first quarter of the year, however, the group's turnover, including MiMoto, was 1.2 million dollars, or a little more than 1 million euros, with an operating loss of over 10 million dollars and a net loss of over 15 million. Even taking into account that the winter quarter is not favorable for scooters, at this rate, the funds raised by landing on the Nasdaq could run out by the end of the year.

The shared urban mobility market - from renting bicycles and scooters to car rental - is challenging, and even Helbiz's direct competitors are not doing very well. As the Wall Street Journal wrote, “Users show little loyalty to individual brands and competition is fierce. Many companies have closed down or merged, including names like Skip, Scoot, and Jump ”.

The bankruptcy of the Californian Skip - news of ten days ago - also affects Helbiz, given that in December 2020 the company from Palella announced that it had bought the competitor. But Helbiz told the American media that Skip's bankruptcy does not concern her, because she has no shares in the company. Palella is not new to announcements that then do not come true. Two years ago he announced the entry into the capital of Helbiz of the Chinese partner Forever Sharing, which should have acquired an 8 percent stake in exchange for a maxi-supply of electric bicycles; the operation was then no longer talked about, and when asked Helbiz replied that "the Chinese had problems with deliveries and nothing more was done".

Will salvation come from diversification? Helbiz has recently landed in home delivery of food with its own kitchen (Helbiz Kitchen); very recent is the idea of ​​managing TV rights on sporting events, with the purchase of broadcasting rights abroad for Italian Serie B matches.

Already in 2019, then, the imaginative managers of Helbiz were thinking of a flying taxi service with drones "in collaboration with the Chinese Ehang", with the first tests to be carried out already in 2019 in Antigua. For the operation - wrote a hagiographer - "Helbiz managed to beat the competition of Uber over time". The flying taxis then disappeared from the radar, perhaps because someone must have advised Helbiz not to shoot them too big ...

Update from August 26, 2021: Helbiz threatens reporters and asks for a rectification without rectification