What happened
Shares of start-up electric vehicle (EV) maker Canoo (GOEV -3.12%) spiked as much as 6.5% Thursday morning after news of a new vehicle order surfaced. As of 10:45 a.m. ET, the stock lost much of that gain but remained higher by 0.9%.
So what
Investors have feared the company might have trouble getting its niche EV business up and running before it ran short on funding. Last month Canoo announced it was raising about $52.5 million by issuing new shares for institutional investors at what was then a discounted price of $1.05 per share. At that time the stock was trading at $1.25 per share, but it has since plunged to just $0.62 per share at yesterday's closing price.
But a new order for 50 of its Lifestyle Delivery Vehicle (LDV) battery-electric vans that was just announced has the stock stabilizing off its month-long decline.
Now what
The new electric vans for Schindler Elevator Corporation will be customized for use by its service technicians in the U.S. Schindler said the vans will help it achieve its zero-emissions goal.
Image source: Canoo.
Canoo also has plans to supply Walmart with a fleet of up to 9,000 of its commercial vans for the retailer to use for its online business. Canoo also has orders for more than 12,000 vehicles from a work-ready van-rental provider and a national fleet-leasing company.
But the EV maker hasn't begun production yet and as the recent share sale showed, it isn't financially secure as it prepares to finally begin generating revenue. Even aggressive investors may want to stay on the sidelines until the company actually starts delivering vehicles and proving its business is sustainable.
