GOEV

Canoo Inc.

1.88
USD
-5.30%
1.88
USD
-5.30%
1.75 13.35
52 weeks
52 weeks

Mkt Cap 447.72M

Shares Out 238.78M

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Why Canoo Stock Dropped Tuesday

What happened In early July, specialty electric vehicle maker Canoo (NASDAQ: GOEV) shocked investors with news that it was getting a vehicle order from retail giant Walmart. Investors jumped into the stock, sending it up 80% in a single day. But the stock is down about 25% since then, including a drop of 15.6% today as of 10:43 a.m. ET. So what Today's drop came from information gleaned from the second-quarter report Canoo released last night. After Walmart said it would order 4,500 vehicles from Canoo to supply its e-commerce delivery fleet, investors thought it was a lifeline for the company. Canoo said it would build the vehicles at its small Arkansas facility located near Walmart headquarters. But last night, Canoo CEO Tony Aquila said it will initially use a third-party contractor to produce the electric delivery vans. Now what Canoo has reported a net loss of $290 million in the first half of 2022. While it has access to up to $250 million in capital, the company has only $33.8 million in cash and cash equivalents on its balance sheet. The company's survival might be tied to the Walmart business, and it said so publicly yesterday. In its quarterly filing, the company stated, "We expect that a substantial portion of our initial revenue will be from one customer. If we are unable to maintain this relationship, or if Walmart purchases significantly fewer vehicles than we currently anticipate or none at all, our business, prospects, financial condition, results of operations, and cash flows could be materially and adversely affected." When investors heard there is a change in its plans to satisfy the Walmart order before production has even started, they seemed to feel the risk level with Canoo had ratcheted up a notch. 10 stocks we like better than Canoo Holdings Ltd. When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Canoo Holdings Ltd. wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of July 27, 2022 Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart Inc. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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