What happened
It should have been good news for Canoo (GOEV 2.59%) -- but instead, it has turned into a 9.6% rout of one of the nation's tiniest EV start-ups.
On Monday, Canoo announced that in a follow-on to its Feb. 1 contract win to supply "battery modules" to the U.S. Department of Defense's Defense Innovation Unit, Canoo has just received a "significantly expanded" contract.
Lacking details on how much this contract -- or either of these contracts -- is actually worth to Canoo, however, investors don't seem particularly excited by the news, and instead of going up, Canoo stock went down -- way down -- today.
So what
Canoo argues in a press release that its "technologically advanced battery pack ... can be scaled for use on operational military platforms and will set the stage for standardization of energy-dense lithium batteries for the U.S. Navy." And it may well be true that the battery pack can be used for that purpose, but it remains to be seen whether it will.
In the meantime, the fact that Canoo isn't revealing anything about the actual size of the contract, in terms of revenues or even the number of batteries it will deliver to the Navy, tends to rob the company's press releases of significance.
Now what
Canoo does have other sources for revenue -- a Light Tactical Vehicle (LTV) that the U.S. Army is looking at, as well as Crew Transportation Vehicles that NASA has ordered (and which were due for delivery last month). But again, in neither of the press releases announcing these contracts did Canoo reveal what the contracts might be worth to it.
In the meantime, Canoo continues in a state of "revenue-less-ness," with no money coming in on its top line in four of the past five years, and trailing-12-month losses topping $453 million. Until the company can provide some hard numbers showing a cash infusion to the top line and the potential for some future profits on the bottom line, I'm afraid it's going to take more than just press releases to save this stock.
