SEV - Sono Group downgraded on Sion program shutdown COO exit
Cantor Fitzgerald cut its rating on Sono Group ( NASDAQ: SEV ) to Neutral from Overweight after the announcement that its Sion Passenger Car Program will be shuttered.
The company announced on Friday that its Sion program will be shuttered and 300 employees will be laid off. Additionally, COO Thomas Hausch announced that he would step down as the program came to an end on Friday.
Cantor Fitzgerald analyst Andres Sheppard noted that the program had 45,000 reservations and pre-orders upon the date of its cancellation and the company will now pursue a payback plan for these deposits. While he acknowledged the company’s need to offload the business due to its capital intensive nature, Sheppard said the cancellation was “disappointing since the Sion program was management's core passion and business model” and the paybacks will likely weigh on the business.
“Unfortunately, given the difficult macro environment to raise capital, Sono was never able to ramp-up manufacturing of its vehicles,” he told clients. “We lower our PT to $1 from $3 and downgrade SEV to Neutral from [Overweight] due to the termination of the Sion Car Program, eliminating the possibility of a significant revenue stream and a disruptive product for the company.”
Shares of the German auto startup slid 2.5% in premarket trading on Monday, extending an over 25% drop on Friday.
Read more on the decision to discontinue the program .
For further details see:
Sono Group downgraded on Sion program shutdown, COO exit