Canoo (NASDAQ: GOEV) shares plummeted almost 9% in the extended trading Monday as the company announced the acquisition of manufacturing assets at significantly reduced prices. This move aims to enhance the production scale at its Oklahoma City facility.
Canoo (GOEV) has acquired various manufacturing assets, including robotics and control processing equipment designed to build vehicle cabins. This strategic purchase is part of Canoo’s efforts to scale manufacturing and facilitate additional customer deliveries in 2024. The company proactively explores alternative routes to acquire high-value equipment at reduced prices. Notably, Canoo secured these assets at a discounted price, over 80% of their estimated value.
Greg Ethridge, Chief Financial Officer at Canoo (NASDAQ: GOEV), said,
“We are a creative and adaptive team and continue to find alternative ways to acquire manufacturing assets to meet our production goals and customer commitments.”
He added,
“With the increasing cost of capital environment, the Canoo team has been diligent in deploying capital and has aggressively pursued critical manufacturing assets at reduced prices.”
Ramesh Murthy, Chief Accounting Officer at Canoo, further noted,
“While many companies invested in capital equipment prematurely, we continue to phase our investment with our growth. These opportunities to acquire assets at significantly discounted prices have allowed us to further reduce our 2023 capital expenditures and also to improve our guidance by millions of dollars.”
The recently acquired assets will be deployed in Oklahoma to support Canoo’s manufacturing strategy and contribute to the creation of advanced manufacturing jobs in the state.
Meanwhile, Wedbush analyst Dan Ives has given the Canoo stock a positive “outperform” rating, setting a price target of $4. This target implies a significant upside of 1,804% from Friday’s closing price of 23 cents. Notably, this price target surpasses all Wall Street estimates, including the previous high target of $3.
Mary Lee is a freelance writer and journalist based in Toronto, Canada. She holds an M.S. degree in business and economic journalism from Columbia University’s Graduate School of Journalism in New York and a certificate in digital marketing from the University of Toronto.
