Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why XL Fleet Stock Tanked Today

By Evan Niu, CFA - Dec 29, 2020 at 3:46PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The vehicle electrification specialist is experiencing extreme volatility after spiking last week.

What happened

Shares of XL Fleet ( XL ) fell as much as 12% today despite a new disclosure that a billionaire has accumulated a 9.6% stake in the freshly public company. As of 2:45 p.m. EST, the stock was down 9%.

So what

XL Fleet went public last week after closing its merger with Pivotal Investment, a special-purpose acquisition company (SPAC). The company provides various electrification solutions to commercial and municipal customers, and electric vehicle (EV) stocks more broadly have been soaring throughout the year while also experiencing extreme volatility.

Red stock chart going down

Image source: Getty Images.

In a fresh Schedule 13G regulatory filing this morning, New Balance founder James Davis disclosed that he holds over 12.5 million shares, representing 9.6% of total shares outstanding. However, this isn't exactly new information, as the position had been disclosed in previous filings.

Davis has had other ties to the company. The entrepreneur owns the property that XL Fleet leases for its headquarters in Brighton, Massachusetts, and Davis had bought preferred shares in the company's Series D funding round, according to the prospectus.

Now what

Shares had skyrocketed by 86% last Wednesday after prominent short-seller Citron Research disclosed a long position and assigned a price target of $60. It's not uncommon for stocks to pull back after such a massive surge as some investors take profits. Such spikes also often attract short-sellers who believe the company may be overvalued. XL Fleet stock topped out at $35 last week.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

XL Group Ltd Stock Quote
XL Group Ltd
XL

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
634%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/02/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.