Why Spire Global Stock Just Crashed 50%

Spire Global (NYSE: SPIR) stock crashed 49.7% through 11:11 a.m. ET Wednesday, and a lot of investors are wondering why right now. What the heck is going on? There's neither a single press release about this nor anything on the company's website to explain the disaster.

Lucky for you, I've found the answer.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

In a Securities and Exchange Commission 8-k filing last night, Spire Global warned investors about a major risk to their investment. Remember how, back in November, Spire Global said it was selling its maritime ship-tracking business to Belgian analytics company Kpler? Remember that Spire was counting on Kpler to pay $241 million for the business and that Spire planned to use that money to pay off all its debts?

Yeah, that isn't happening anymore.

Spire Global's no good, very bad news

As Spire explains, Kpler agreed to close its purchase of the maritime business in the first quarter of 2025. "All conditions to closing [now] have been satisfied or could be satisfied," says Spire. Yet, for some reason, Kpler "has failed to consummate the closing" and appears to be trying to get out of the deal.

Spire is suing in Delaware Court to force Kpler to proceed with its purchase, but "there is no assurance" it will succeed. Worse news for Spire, the company had relied upon this sale going through to pay off its outstanding debts. Without the promised cash from Kpler, Spire lacks the funds to do that.

What does this mean for Spire Global stock?

Spire warns that it's already in breach of its loan obligations and that its lender, Blue Torch Finance LLC, has the right to accelerate the due date for its payments and demand payment in full -- which Spire cannot currently afford. As a result, Spire may be forced to seek new loans or stock sales to pay off its old loans.

On top of all this bad news, the company is busy restating its earnings and has had to issue a going concern warning, implying that it may go bankrupt within a year if Kpler doesn't pay up.

Should you invest $1,000 in Spire Global right now?

Before you buy stock in Spire Global, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Spire Global wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $813,868!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

Learn more »

*Stock Advisor returns as of February 7, 2025

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.