What happened

Shares of Canoo (GOEV -0.28%) dropped 13% early today, and remained down 11% as of noon EST. 

Canoo began trading publicly last week after it closed its merger with the special purpose acquisition company (SPAC) Hennessy Capital.

So what 

Hennessy shareholders have known about the merger since it was announced in August. Shares had moved up sharply leading into the closing of the transaction, and some shareholders are taking profits now. 

Canoo multi-purpose delivery vehicle crossing green suspension bridge

A Canoo electric multi-purpose delivery vehicle. Image source: Canoo.

After hitting a high of $22 per share two weeks ago, shares have dropped almost 30% including today's dip. 

Now what 

Canoo will use a "skateboard" platform to maximize vehicle interior space. It plans to make its first consumer "lifestyle" van-like model beginning in 2022. The company recently also unveiled its electric multi-purpose delivery vehicle (MPDV), aiming for the last-mile and package delivery fleet markets. 

The business model will offer consumers a membership for Canoo vehicles that will provide service including maintenance and battery charging, as well as month-to-month flexibility for returns. 

The lifestyle vehicle will have a 250-mile range, and capacity for seven seats. Canoo MPDVs will be available in cargo volumes of 200 cubic feet and 450 cubic feet, both of which will have shorter battery range than the lifestyle vehicle. 

Though the membership model is fairly unique, the vehicles themselves are in a niche that includes other EV competitors. Investors should consider an investment in Canoo speculative, as production is more than one year away. There will likely be more of a differentiation among competitors over that time. Today's drop likely reflects some investors taking gains knowing there will be more volatility in this name going forward.