Five weeks after electric vehicle startup Canoo, the firm that received millions in incentives from Oklahoma and Oklahoma City, announced the sale discounted shares to raise more than $52 million, and its shares are on a downhill ride. They have lost nearly half their value from more than a month ago.
When Canoo announced the sale in early February, shares closed down more than 12% and settled at $1.09. That was on top of a loss of more than 80% of value in the previous 12 months.
Since then, Canoo shares have dropped 52 cents or 47% since the $1.09 mark, closing Wednesday at 57 cents per share. Wednesday’s close saw a drop of 3.05% for the day.
What kind of an impact the falling shares will undoubtedly have on the EV maker’s ability to move forward with creation of an Oklahoma City plant and the creation of hundreds of promised jobs is unknown.
No doubt, one council member who could be anxious about the deal is Nikki Nice who opposed the incentive package in December 2022.
“I don’t have confidence in what they are going to do as far as employment is involved,” Nice said at the time.
“We’re probably going to be eating our words as this progresses.”
At the time of the share sale in early February, Canoo said it intended to use the estimated gross proceeds of approximately $52.5 million “for general working capital purposes.”
The sale came after the car-maker admitted in November 2022 that it was running low on cash, confirming it had $6.8 million on hand at the end of the third quarter. Canoo was expected to file its fourth-quarter financial report in late February but records on file with the Securities and Exchange Commission show no such filing.
The last filing, made on Feb. 28 of this year, was a Delaware court ruling that approved an amended Canoo certificate of Incorporation validating all shares of capital stock. An early February filing also showed The Vanguard Group based in Malvern, Pennsylvania owned 22,964,694 shares or 6.66% of the shares in the company.