The value of shares in EV maker Canoo, the firm that won $1 million in help from Oklahoma City to locate a plant there and a $15 million promise in aid from the state, has dropped nearly 39% since the firm announced the sale of 50 million discounted shares earlier in the month.
As of Friday, February 24, shares traded at 73 cents, tumbling another 6.97% or $0.05 from the previous day. On Feb. 3, a few days before Canoo hoped to raise $52 million through the discounted shares sale, stock traded at $1.19 and even reached a high on that day of $1.28.
Shares dropped nearly 9% a week after the announcement by the manufacturer that has a plant in Pryor. The announcement on Feb. 6 indicated Canoo offered its common stock at a combined purchase price of $1.05 per share and accompanying warrant. The warrants had an exercise price of $1.30 per share.
Canoo hoped to raise $52.5 million and according to the announcement use the money “for general working capital purposes.” In other words, stay in business.
Oklahoma City Council members voted 5-2 in December 2022 in support of a $1 million economic incentive for Canoo to create a manufacturing plant in the city by taking over the former Terex telehandler plant near I-40 and Morgan road.
What councilwoman Nikki Nice warned at the time might be recalled at Canoo shares continue their downward spiral.
“I don’t have confidence in what they are going to do as far as employment is involved. We’re probably going to be eating our words as this progresses.”
Canoo promised to create 550 jobs and hoped to begin producing new electric vehicles at the plant early this year. Oklahoma City won’t be out of the $1 million in incentives because under the agreement, it won’t make payments until Canoo starts performing.
“—if nothing ever happens, we’ll have expended nothing,” said Mayor David Holt at the time of the approval in December, adding, “But if t he plans are realized, OKC will have gained hundreds of high-paying manufacturing jobs in a growing sector of the modern economy.”
The investment by Oklahoma City came after the state of Oklahoma agreed to pay $15 million to Canoo in March 2022 to begin building a new plant in Pryor. Oklahoma also agreed to buy 1,000 of Canoo’s vehicles.
By July of last year, Canoo was behind schedule on construction of the plant in Pryor. A spokesperson for the company said the time, the plans originally called for the plant to be operational in 2023 but the new goal was changed to 2024.