The stock of the electric vehicle start-up has been on a roller coaster ride since the announcement of a major deal with retail giant Walmart on Tuesday. After a setback on Wednesday, the stock took off again on Thursday when the company announced another major contract.
Disclaimer - Nothing in this post is financial advise
Tuesday - Canoo announces Walmart deal
Canoo(Ticker: GOEV), a developer of electric delivery vehicles and van-like consumer vehicles, announced that it had signed a deal with supermarket giant Walmart(Ticker: WMT). Walmart agreed to order up to 10,000 battery-powered vehicles from Canoo for its delivery fleet. The initial purchase from Walmart will be 4,500 vehicles with an option to order another 5,500 vehicles.
Wednesday - Share price sink after amazon restriction
Part of Canoo's deal with Walmart is that the company won't sell any vehicles to Walmarts rival Amazon(Ticker: AMZN). Also, Canno Inc. can't be acquired by Amazon, according to documents released Wednesday. This restriction will carry on until the deal is finished or terminated.
Thursday - Canoo announces deal with U.S. Army
Shares surged again by 30% after Canoo Inc. announced that it was awarded a contract to provide an electric vehicle for analysis and demonstration by the U.S. Army. This order supports the U.S. military's effort to incorporate scalable and adaptable capabilities into operational and garrison environments, Canoo said.
Canoo Inc., running out of cash
Only weeks ago, Canoo issued a dreaded "going concern" notice for investors. Warning in its regulatory filing, that the company was running short on cash and saying that "substantial doubt exists" that it would be able to continue business for the next 12 months. Before the news hit the stock market this week, the stock was down over 70% year-to-date.
Bottom Line
Canoo's business is looking better than ever, but investors should still consider the risk of investing in Cannoo Inc. The deal with Walmart is non-binding, and we also do not know yet if the contract with the U.S. Army will bring any significant amount of cash into the company's business.
Disclaimer - Nothing in this post is financial advise
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