Shares of online car retailer Cazoo Group (CZOO 75.20%) traded more than 15% higher as of 10:52 a.m. ET today after the company announced its plans to withdraw its operations from the European Union.
Cazoo, which went public through a special purpose acquisition company (SPAC), has seen its stock hammered since starting to trade independently. The stock is down more than 88% year to date.
On Aug. 2, Cazoo said it would conduct a strategic review of its business in Europe and released the results of that review today.
"Given our target of reaching profitability by the end of next year, we have taken the tough decision to focus solely on the huge UK used car market, worth over [100 billion pounds] annually," Cazoo's CEO Alex Chesterman said in a statement.
Chesterman added, "The strong customer demand we are seeing in the core UK business gives us high confidence in the future opportunity and the decision we have taken today to withdraw from mainland Europe ensures that our balance sheet remains strong and that we have a plan which we believe no longer requires any further external funding."
In withdrawing from the United Kingdom, Cazoo expects to achieve cost savings of more than 100 million pounds by the end of 2023, which the company also believes will speed up its path to profitability.
Cazoo is not the first tech company this year to have to make some tough decisions. It may not be the greatest company in the world, but if Cazoo can improve its margins there could be upside given how far the stock has fallen.