What happened
Shares of Sono Group (SEV +8.50%) are short-circuiting at 11:12 a.m. ET on Friday after the electric vehicle (EV) start-up priced its secondary offering. The stock is falling 19.3% after the company announced it was pricing the shares at just $4 each, some 16% below where the stock closed on Thursday.
The EV stock collapsed the other day, too, when it first announced the offering.
Image source: Sono Group.
So what
The follow-on offering will sell up to 10 million shares -- with an additional 1.5 million available for the underwriters at an even greater discount -- so that Sono Group can stay operational until it's able to start producing its Sion EV, a solar-powered car where the panels are integrated into the vehicle's body.
It sees itself licensing the technology to manufacturers of buses, trucks, camper vans, trains, and even boats as an additional source of revenue. However, it doesn't foresee delivering its first vehicle to customers until the second half of 2023, so it will need financing to keep the doors open until then.
NASDAQ: SEV
Key Data Points
Now what
Sono Group is trying to stay lean. It has just one model of vehicle with only one variant permitted, and it will have a third party manufacture the car, which will be sold directly to consumers. It sees that as keeping its costs low and allowing it to be the low-cost leader in the space.
The electric car stock has been fried since going public last November, losing 92% of its value, and investors likely see the offering as simply devaluing its shares even more.
