👉 Background: F45 is a culty high-intensity fitness studio that became one of the fastest growing fitness franchises in the whole world. Marky Mark Wahlberg took a stake in the company and shortly after, F45 listed on the New York Stock Exchange.

👉 What happened: F45 spent $60 million per quarter growing the business aggressively. However, the shine came off like a sweaty headband with many franchisees shutting down. On top of that, F45's share price has dropped by 99%... and they've failed to remain compliant with their financial reports.

👉 What else: Now, F45 is planning to delist from the New York Stock Exchange because its low trading price has caused more strain than a deadlift gone wrong.

What's the key learning?

💡A rapidly declining share price creates a challenging cycle for companies. Ironically, the company will struggle to attract investment at the exact time when it may need it most.

💡If F45 wants to fund a new project or just needs capital to survive, it may need to sell new shares. But if those shares are now worth 99% less than they were previously, they'll have to sell many many more shares to raise the needed funds. And this will significantly dilute existing shareholders.

💡It's like snowball effect where the problems keep piling up. So in F45's case, they've decided to delist from the NYSE, cut costs and hopefully manage to see another dumbbell curl.

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