Canoo nasdaq Goev Stock Plummets 10 Heres Why

Canoo (NASDAQ: GOEV) Stock Plummets 10% – Here’s Why

Canoo (NASDAQ: GOEV) stock plunged almost 10% on Wednesday after the company announced plans to execute a 1-for-23 reverse stock split on March 8. The move aims to avert a potential delisting by boosting GOEV’s stock price to over $1 per share.

Wedbush analyst Dan Ives maintains a bullish outlook on GOEV stock, rating it as “outperform.” Ives believes Canoo holds promise as a “disruptive player” in the delivery van sector.

Earlier in January, Ives highlighted Canoo’s substantial order commitments, totaling $750 million, including a notable contract with Walmart (NYSE: WMT), which has been expanding its delivery operations.

Canoo made its public debut in December 2020 via a special purpose acquisition company (SPAC), with its stock closing at around $19 per share on its first trading day. However, in its recent 10-Q filing, management expressed concerns about the company’s financial viability, citing “substantial doubt” regarding its ability to sustain operations without additional capital. Canoo reported a cash balance of only $8.2 million and incurred a loss of $111 million, or 18 cents per share, over the three months ended September 30, 2023.

Since then, Canoo has secured funding from the state of Oklahoma in conjunction with a delivery van contract. Recent reports indicate the company has also secured an order for six vans from the U.S. Postal Service.

Canoo requires funds to fulfill existing orders and validate its business model. Thus far, it has relied on convertible debt, which are notes with the potential to convert into stocks. As per its November report, it had $37 million in outstanding current convertible notes and an additional $45 million in non-current convertibles.

Canoo (NASDAQ: GOEV) Stock Price Action

GOEV stock plummeted 8.63% to close at $0.0868 on Wednesday. The traders had exchanged hands with 104,604,831 (104.60 million) shares compared to the average daily trading volume of 64.32 million. The stock is now down 66.25% year-to-date (YTD) and 87.61% for the past 12 months.