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Why Electric Scooters Sent Harley-Davidson's Stock Higher

By Travis Hoium – Updated Apr 11, 2019 at 2:59PM

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Harley-Davidson is expanding into the kids' scooter market.

What happened 

Shares of motorcycle maker Harley-Davidson (HOG -0.14%) rose as much as 5.2% in trading Tuesday after the company announced a very surprising addition. Shares gave back some of those gains and closed down 3.4% for the day. 

So what

Harley-Davidson is acquiring StaCyc, maker of electric two-wheel scooters, or cycles, for kids. The company's models range from $649 to $699 and are currently sold through specialty bicycle retailers, online, and at 29 Harley-Davidson stores. 

Electric cycles from StaCyc.

Image source: StaCyc.

Adding StaCyc increases the company's electric cycle lineup shortly after launching its own electric motorcycle, called LiveWire. The theory for Harley-Davidson is that electric scooters will be a gateway to the next generation of riders. Whether that plays out could take decades to determine. 

Check out the latest earnings call transcript for Harley-Davidson.

Now what

Harley-Davidson didn't disclose the purchase price of StaCyc but did say the company has "inspired more than 6,000 new riders," implying that just over 6,000 cycles have been sold. That's a very small number and probably makes this a relatively small investment for the company, which may mean it's worth the risk. But investors shouldn't think this is a needle-mover for Harley-Davidson in the foreseeable future. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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