RIVN - Canoo: Solid Product Strategy But Share Dilution And Poor Track Record Should Deter Investors
2024-06-30 09:48:08 ET
Summary
- Canoo has a solid product strategy, focusing on a flexible vehicle platform and the underserved niche of light commercial vehicles.
- The company relies heavily on shareholder dilution for liquidity, raising over $400 million since its IPO. Canoo has access to another $200 million through dilutive agreements with Yorkville.
- Canoo has delivered almost no vehicles in the last 12 months, raising serious concerns about its execution capabilities. Despite opening its Oklahoma production facility, Canoo does not disclose production targets.
- Canoo has between $9 million and $18 million in cash, with a runway of only one to two months. This limited financial cushion and need for further dilution contribute to my "SELL" rating for Canoo stock.
I covered Rivian Automotive, Inc. ( RIVN ), Lucid Group, Inc ( LCID ), Fisker and NIO Inc. ( NIO ) in a recent article , arguing how they do not represent a compelling proposition for shareholders. Some readers reached out asking my opinion about Canoo Inc. ( GOEV ). In this article, I examine how Canoo stacks up against other Electric Vehicle “PurePlayers”, i.e. car makers that exclusively focus on producing EVs....
Canoo: Solid Product Strategy, But Share Dilution And Poor Track Record Should Deter Investors