Securities Arbitration Lawyers BlogSilver Law Group Investigating Mondee Holdings
Silver Law Group is investigating Mondee Holdings on behalf of investors who bought or acquired Mondee Securities.
If you invested in Mondee Securities and have questions about your legal rights, or if you have information relevant to this matter, contact Silver Law Group for a no-cost consultation at 800-975-4353 to discuss your potential options.
Recently, Night Market Research, an equity research firm, released its report called “Mondee: Bad Trip Choking on High Interest Debt, 100% Downside.” In it, the firm discussed its findings that the Austin, TX based company is facing the “probability of near-term common equity wipeout with rising default risk on growing debt balance.”
In July of 2022, Mondee Holdings went public with a reverse merger with ITHAX Acquisition Corp, a SPAC, or “Special Purpose Acquisition Company.”
Calling it “marginally profitable,” “horribly managed and dangerously over-leveraged,” the company’s current debt consists of $155 million in term loans at the Secured Overnight Financing Rate (SOFR) plus 8.5% (23% effective rate through 3Q23) maturing at the end of 2024. There is also $102 million in preferred equity accruing paid-in-kind dividends at SOFR plus 7.0-8.5%, increasing to SOFR plus 10.5-12% next year. The current SOFR is 5.3%.
The report indicates that the company cannot support its current amount of debts, and the loans became “current debt” on January 1. Mondee acquired these loans between December of 2019 through February of 2020 just prior to travel stopping due to the pandemic.
Mondee’s stock closed at $2.28 on January 19, 2024, down over 82% from its September 9, 2022 closing price of $13.07.
The Online Travel Agency
Mondee is one of the largest airfare consolidators in the US. It also operates an online travel agency (OTA) that locates discounted airfare and resells them primarily to corporate travel managers and travel agencies. As a business-to-business “intermediary,” Mondee operates several online platforms, including Trippro, Tripplanet, Rockettrip, and Unpub. But since most airlines sell their tickets on their own websites, the report discusses the obsolescence of these platforms.
Night Market Research staff attempted to use these platforms and had mixed results. One platform didn’t work at all and had data security issues, and others were functional but difficult to use.
Last July, Mondee also introduced its new AI (artificial intelligence) tool called Abhi. Night Market Research staff found to be nothing more than a typical chatbot that recommended itineraries and offer booking links inside Tripplanet rather than links to third-party booking sites. Research does not believe it will render anything useful or greatly improve the company’s revenues.
Did You Invest With Mondee Holdings?
If you purchased or otherwise acquired Mondee Securities and would like to discuss a possible claim, contact the securities law attorneys at Silver Law Group at (800) 975-4345 or contact us online.
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you.