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Why Lightning eMotors Stock Is Down Today

By John Rosevear – Aug 11, 2021 at 10:52AM

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It was up big yesterday, but today is a different story.

What happened

Shares of Lightning eMotors (ZEV 10.30%) were trading lower on Wednesday, a day after the company's stock price surged on news of a deal with a shuttle-bus maker owned by Berkshire Hathaway (BRK.A 0.35%) (BRK.B 0.40%).

As of 10:45 a.m. EDT, Lightning eMotors' shares were down about 8.5% from Tuesday's closing price -- but still up almost 70% since the end of last week. 

So what

Lightning eMotors' stock closed up a whopping 81% on Tuesday on some big news: The company, which makes electric drivetrains for commercial vehicles like pickups and vans, signed a deal to provide powertrains for up to 7,500 shuttle buses to be built by Berkshire-owned Forest River. 

Lightning eMotors will also provide charging products and services under the deal, which runs for the next 4 1/2 years. All in, it could be worth as much as $850 million in revenue, making it a big deal for the small company.

A Ford Transit commercial van with a Lightning eMotors electric drivetrain.

Lightning eMotors installs electric drivetrains in commercial vehicles, many of which are built by Ford Motor Company. Image source: Lightning eMotors.

But it's more than that. For much of its existence, Lightning eMotors has focused on fitting electric drivetrains to a variety of commercial vehicles based on underpinnings supplied by Ford Motor Company (F 0.36%), including Transit commercial vans and various medium-duty vehicles built on Ford Super Duty chassis. 

But with Ford moving to launch its own battery-electric version of the huge-selling Transit commercial van this fall, Lightning eMotors needed a Plan B -- and the deal with Forest River seems to have provided one.

That's why auto investors bid the stock up in a huge way on Tuesday. Why was it down on Wednesday? Because a bit of settling is to be expected after an 81% one-day gain. 

Now what

Investors holding those suddenly more valuable shares won't have to wait long for an update. Lightning eMotors will report its second-quarter results after the U.S. markets close next Monday, Aug. 16.

John Rosevear owns shares of Ford. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

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Stocks Mentioned

Lightning eMotors, Inc Stock Quote
Lightning eMotors, Inc
$0.67 (10.30%) $0.06
Berkshire Hathaway (A shares) Stock Quote
Berkshire Hathaway (A shares)
$478,675.55 (0.35%) $1,655.56
Berkshire Hathaway (B shares) Stock Quote
Berkshire Hathaway (B shares)
$317.43 (0.40%) $1.25
Ford Stock Quote
$14.08 (0.36%) $0.05

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

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