EV Company Canoo May Fail

By Douglas McIntyre • August 18, 2024

Vasilis V. Pexels

Shares of EV company Canoo have collapsed recently and are down 98% in two years. The primary reason, according to Seeking Alpha, “Canoo’s negative working capital balance, high cash burn rate, and reliance on financing from Yorkville raise concerns about continuous dilution and future prospects.”

Canoo recently released earnings. Its revenue of $605,000 missed Wall St. estimates of more than double that, and it lost $4.7 million.

Lucid And Rivian

Canoo now falls into the same class as Lucid and Rivian. It is too small to survive in a world where Tesla and massive EV investments by legacy companies have overcrowded the sector. Legacy EV investments are now in the tens of billions of dollars. And, in general, EV sales have been weak.

Short Interest

Canoo said it was “testing” and “completing pilots.” That means there is still doubt about whether it can bring a product to market before it runs out of money. Short interest in the shares has also risen.

Wall St. is betting that Canoo is close to dead.