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Why Electrameccanica Stock Popped 8% This Morning

By Rich Smith – Updated Jul 23, 2020 at 11:19AM

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It isn't selling its electric Solo cars yet, but it's getting ready to.

What happened

Shares of tiny Canadian auto company Electrameccanica Vehicles (SOLO -5.26%), a start-up placing its bets on the electric cars popularized by Tesla, leapt out of the gate on Thursday, rising 8.5% as of 10:20 a.m. EDT on the smallest of news: Electrameccanica is opening a new retail store in Portland, Oregon.  

Red Solo electric car.

The electric three-wheeled Solo. Image source: Electrameccanica Vehicles.

So what

Electrameccanica makes the Solo electric car, a three-wheeled, one-passenger cross between an econobox and a motorcycle, boasting a range of 100 miles and a top speed of 80 miles per hour. Manufactured in China at a factory supposedly able to crank out 20,000 of the electro-buggies a year, the company hasn't actually sold any Solos yet, but it's getting ready to.  

According to a New York Times article in May, the company has already opened a retail storefront in Los Angeles and is readying a second in Sherman Oaks, California. Last month, the company unveiled plans to open additional stores in Arizona and Oregon, and today, it announced the location of the latter: On Sept. 1, Electrameccanica will open a storefront at the Washington Square Mall in Portland, Oregon.

Now what

That's it. That's the story. Electrameccanica hasn't sold any cars nor announced any sales numbers, revenue, or profits. It's just opening a store in hopes it will sell a car one day. And the stock is up 8.5%, and Electrameccanica shareholders are $20 million richer, on that news.

Go figure.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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