What happened
Electric vehicle (EV) start-up Canoo (GOEV -8.52%) released its fourth-quarter and full-year 2022 results last night, and the stock popped more than 6% early Friday. As of 12:10 p.m. ET, Canoo shares lost some of that gain but were still up by 4.8%.
So what
On the surface, the report seemed fairly positive, which helps explain the initial jump. The company highlighted that it fulfilled its first order in the fourth quarter. But that was just a single vehicle for a test by the U.S. Army and shouldn't really affect the stock. Though, if the Light Tactical Vehicle (LTV) becomes a big order, that would certainly change the outlook.
Image source: Canoo.
The company also settled an ongoing Securities and Exchange Commission (SEC) investigation for just $1.5 million. So that overhang is now gone. But there is more to be concerned about for investors.
Now what
Canoo has been a troubled EV start-up since it went public in late 2020. The SEC began investigating Canoo in May 2021, just a few months after the company combined with a special purpose acquisition company (SPAC).
The investigation was brought following a string of departures by company officers after the SPAC merger. It involved the company's operations, business model, revenue plan, and customer agreements. The settlement of that investigation for just $1.5 million takes one risk off the table for Canoo investors, but plenty remains.
The company said it ended 2022 with just $36.6 million in cash and equivalents. Canoo's loss from operations in the 2022 fourth quarter was over $83 million. So the company must either raise money quickly or begin generating revenue soon. Management said it expects capital expenditures in the first quarter to be between $30 million and $45 million, along with operating expenses of at least $55 million.
Frankly, there's not much to like from this report. But with the stock down almost 90% over the last year, some investors seem to have decided to take a chance, betting news from Canoo will improve from here.
