May has not been a very happy month for Kano (GOEV) .
At the time, the electric car company was experiencing some serious problems.
Kanoo warned investors earlier in 2022 that “there is significant uncertainty about the company’s ability to continue as a going concern.”
The company posted a net loss of $125.4 million for the first quarter, expanding from $15.2 million in the first quarter of 2021. Canoo also struggled to meet its 2022 production target.
There has been some speculation that Apple (AAPL) You may take a step on Kano.
August saw some serious dog days for Kano, too.
“Can’t stand this at least’
On August 9, Roth Capital analyst Craig Irwin downgraded the company to neutral from buy and lowered his price target to $3.50 from $7 after Canoo posted a larger-than-expected loss in the second quarter and management pushed forward expectations for trade delivery.
Irwin said he expects the delay in starting commercial deliveries to increase cash needs by more than $150 million at a time when “management can’t afford that at least” with $33.8 million of cash available to exit the second quarter and the balance sheet “already in a precarious position.” , he said in a research note.
But then it was a glimmer of hope. Retail giant Walmart (WMT) Canoo offered a lifeline, ordering 4,500 of its electric trucks with the option to purchase thousands more.
The company announced in November 2021 that it had chosen Wal-Mart’s hometown of Bentonville, Ark, as its headquarters, and that it would establish a research and development center and an advanced plant and low-volume production facility for small parcel delivery vehicles in the state.
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The financial ties between Alice Walton – the daughter of the late Walmart founder Sam Walton – and Canoe CEO, Tony Aquila, have been the subject of a Fortune investigation.
Fortune reports that court documents filed in Illinois federal court this week link Alice Walton and the Walton family office to AFV Partners, Aquila’s personal private equity firm that holds a minority stake in the electric car company.
Things looked brighter when Stifel analyst J. Bruce Chan began covering Canoo in August with a buy rating and $4 target price.
The analyst said he was encouraged by Canoo’s focus on “the most profitable auto market segments,” which are compact SUVs, vans and last-mile delivery.
Canoo is able to carry nearly 60% of its cost owed to its next variant model through its multi-platform architecture and is trying to capture value across the vehicle’s entire lifecycle, which Chan described as “significantly different from its peers and established OEMs”.
Last week, Canoo said it had signed an agreement with Zeeba, in which the national fleet leasing company will purchase 5,450 US-made electric vehicles, with an initial binding commitment of 3,000 units through 2024.
Additionally, Zeeba will add Canoo Lifestyle Delivery and Lifestyle vehicles to its long-term fleet rental portfolio.
Then, on October 17, Canoo announced a binding order to purchase 9,300 electric vehicles from Kingbee, a national ready-to-operate car rental company headquartered in West Valley City, Utah, with an option to increase the number of vehicles to 18,600.
The company refused to provide the terms of the order.
“This demand is another major milestone as we allocate production capacity for the coming years,” Aquila said. “Innovators new and old recognize the need for safety, efficiency and productivity in their fleet portfolio.”
Shareholders reacted well to the announcement, with shares of Canoo up 18% to $1.50 at the latest check. The stock is down nearly 70% in the past three months.
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