Market Globalist

Workhorse Group Inc. (WKHS) Stock Surges as Reddit Retail Investors Instigate a Short Squeeze

Workhorse Group Inc. (WKHS) stock prices were up by a significant 17.30% shortly after market trading commenced on June 8th, 2021, bringing the price per share up to USD$16.35 early on in the trading day.

Production Growth

As of the culmination of the quarter ended March 31st 2021, the company announced having produced a cumulative total of 38 C-Series since the beginning of the year. This significant milestone is more than double the numbers produced by the combined production reports of the previous three quarters, indicating a stellar start to the year that the company hopes to extend over the next several quarters.

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Agreement with EAVX

The company also announced during the first quarter of the fiscal year 2021 that it had entered into a strategic development agreement with EAVX, with EAVC being a subsidiary of the leading provider of commercial vehicle body solutions, J.B Poindexter & Co. This move was strategized to facilitate the expansion of the company’s product line and the creation of innovative solutions for new customer segments.

Collaboration with Coulomb Solutions

WKHS also announced over the course of Q1 2021 that it had entered into a supply agreement with Coulomb Solutions, Inc., the North American distributor of Contemporary Amperex Technology Co., Ltd., Commercial Vehicle Battery Systems. This move will see the company’ facilitating the provision of battery systems for WKHS’s delivery van starting in the second quarter of the fiscal year 2021.

Improved Sales

Sales for the first quarter of the fiscal year 2021 were reported to be almost USD$521,000, up massively from the USD$84,000 reported in the first quarter of the fiscal year 2020. This increase in reported sales is largely attributable to an increase in the number of trucks being successfully delivered. The first quarter of the fiscal year 2021 saw a total of six trucks being delivered.

Net Loss and Liquidity Reports

Net loss for the first quarter of fiscal 2021 came in at USD$120.5 million, significantly down from the net income of USD$4.8 million reported in the same quarter of the prior fiscal year. Excluding non-cash adjustments, operating loss for Q1 2021 was USD$16.5 million, up from the USD$9.1 million reported from the year-ago quarter. The company reported a solid liquidity position, with USD$205.1 million in cash as of March 31st 2021.

Future Outlook for WKHS

Armed with a solid liquidity position, WKHS is poised to capitalize on the recent surge in the value of its equity. Despite it being largely driven by retail investors instigating short squeezes, the fortuitous gains could be what the company needs to address fundamental changes that could lead to more organic growth. Current and potential investors are hopeful management will be able to leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.

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