Rough Times for Cake Motorcycles
Recently, Cake Motorcycles has been facing a series of challenges. In January 2024, there was a safety recall by the National Highway Traffic Safety Administration for some Cake Kalk dual sport motorcycles due to potential fire hazards caused by battery cells. Cake had planned to provide replacement batteries to affected customers later in the year.
However, the situation has become more uncertain since then. On February 1, 2024, several Swedish business news outlets reported that Cake Motorcycles is filing for bankruptcy. We have reached out to Cake Motorcycles for comment and will update this article with any response we receive.
According to Cake CEO Stefan Ytterborn, multiple factors have contributed to this situation. The most recent setback was the failure of negotiations for Cake's latest round of funding, which completely fell through on January 31, 2024.
Earlier, on January 24, 2024, it was reported that Cake's financial situation was so dire that it couldn't pay salaries for its approximately 139 employees.
Ytterborn explained that there are several circumstances that led to this situation, including the fact that people are hesitant to pay a significant amount of money for something they haven't tested. He believes that offering better opportunities for test rides would generate more customer interest.
In 2023, Cake saw an increase in consumer sales, but it sold a total of only 6,000 bikes. The company estimates that it needs to sell at least 7,500 to 10,000 bikes per year to achieve profitability.
Additionally, Cake reportedly has six different share classes for investors, each with different rules regarding dividends. This discourages potential shareholders from joining lower classes that are less likely to receive dividends.
Bankruptcy proceedings for Cake officially began in Sweden on February 1, 2024. The outcome of this situation is still uncertain as the proceedings are ongoing.
For more detailed information about the company's financials, including its losses, you can refer to the article by Dagens Industri.
As of now, Cake has not issued any official statement regarding these developments. The most recent statement on Cake's website, posted on January 25, 2024, announces a new distribution network for its bikes in the Czech Republic.
We will continue to provide updates on any new information or official statements from Cake as they become available.