Written by Cláudio Afonso | LinkedIn | X
Shares of the electric vehicle startup Canoo initially surged 14 percent on Friday, reaching $2.49 per share, before experiencing a dramatic drop of 42 percent within 21 minutes.
By 1:57 p.m. Eastern Time, the stock had fallen to $1.45, marking a new three-month low.
Volume surged to 24.35 million shares during this rapid drop, indicating heavy selling pressure as the trading volume was is currently on track to reach four times the average of the past three months.
Late Thursday, the company announced it had entered into a Pre-Paid Advance Agreement (PPA) with YA II PN, Ltd., managed by Yorkville Advisors.
Effective as of Tuesday, the agreement involves Yorkville advancing $15 million to Canoo. According to a form filed with the SEC, the advance will be offset by the issuance of Canoo’s common stock to Yorkville at an initial purchase price of $2.30 per share.
After accounting for the commitment fee and purchase price discount, Canoo is expected to receive approximately $14.1 million in net proceeds.
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The stock is set to join the Russell 3000 Index, according to a preliminary list of additions posted by FTSE Russell on Friday. The Index measures the performance of the 3,000 largest publicly traded companies in the U.S. by market capitalization.
The annual Russell US Indexes reconstitution ranks the largest U.S. stocks by market capitalization as of the last day of April.
Last month, Roth Capital/MKM analyst Craig Irwin lowered the price target on Canoo shares from $4.00 to $3.00, maintaining a Neutral rating. This adjustment followed the EV startup’s earnings results reported earlier.
Canoo announced in early April a partnership with Red Sea Global to conduct trials on three models, namely Canoo‘s Lifestyle Vehicle (LV), Lifestyle Delivery Vehicle (LDV) 190, and the Bulldog pickup truck.
These trials aim to facilitate transportation of visitors between Saudi Arabia’s international airport, resorts, and excursions — the company said in a statement.
Written by Cláudio Afonso | LinkedIn | X
