Canoo Inc. (GOEV) stock prices were up by a significant 26.87% shortly after market trading commenced on June 8th, 2021, bringing the price per share up to USD$11.29 early on in the trading day.
Poor Track Record
The company saw the value of its shares slump by 10.2% in May of the fiscal year 2021, as per data from S&P Global Market Intelligence. The stock’s performance was a part of a broader trend that saw the slashing of equity value throughout the electric vehicle space.
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Dire Straits for GOEV
Despite the company having appeared to have gotten a boost from its strong financial reports for the first quarter of the fiscal year 2021, GOEV still closed out the month with a double digit drop in value. In their reports published on May 17th, 2021, the company reported no revenue for the quarter and a massive USD$97 million in operating loss. The silver lining was the unveiling of the company’s pricing for its Lifestyle Vehicle, which is forecasted to hit the market in 2022, with a price tag ranging from USD$34,750 to USD$49,950.
Financial Situation
With the end of the first quarter having seen the company hold USD$641.9 million in cash and cash equivalents, GOEV forecasts operating expenses for the second quarter of fiscal 2021 to be between USD$65 million and USD$75 million. Capital expenditures for the period are expected to be between USD$45 million and USD$55 million.
Meme Stock Status
In conjunction with positive market momentum, the company seems to be benefiting from the fortuitous traction leveraged by the meme stock phenomenon. Particularly, Reddit-driven gains for the EV specialist Workhorse Group are likely to have had a spillover effect that boosted the value of GOEV’s shares, as well as that of other contenders in the EV space.
Risk Associated with GOEV
While the overall EV market is on the precipice of explosive growth over the next decade and beyond, investors are cautioned to tread with care. GOEV has yet to release a commercial vehicle, yet it still has a massive market capitalization of USD$2.1 billion. While the company has plans to launch a vehicle by next year, as well as follow-up plans for a pickup truck and vehicles tailored for delivery and sporting purposes, its valuation seems to be heavily inflated.
Future Outlook for GOEV
Armed with the fortuitous crosshairs of the Reddit-driven meme stock phenomenon, GOEV is poised to capitalize on the recent surge in its equity value to usher in growth more organically moving forward. The company hopes to rectify its shortcomings and address its fundamentals with the opportunity granted to it by the recent market movement. Current and potential investors are hopeful that management will leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.
