One stock that has had a truly rollercoaster year so far is WKHS stock. Workhorse Group Inc (NASDAQ:WKHS) is involved in manufacturing battery-run delivery vehicles, and over the course of the year, the stock has had plenty of positive news that had raised its stock price.
However, over the course of this week, WKHS stock tanked by more than 20% and, incredibly enough, there was no news with regards to the company’s business that could have caused the slump. Hence, it is perhaps time to delve a bit deeper and figure out what is going on.
One of the biggest reasons behind the positivity with regards to Workhorse stock is that there is a belief that the company could grow fairly quickly. Since Workhorse Group has previously supplied 125 electric-powered delivery trucks to UPS (NYSE:UPS), there is speculation that the company could be in line for the $6.5 billion contract with the United States Postal Service for 180,000 such vehicles. That speculation led to a massive rally in WKHS stock.
On the other hand, the fact that Workhorse Group was in talks with automobile giant General Motors (NYSE:GM) over the purchase of the latter’s Lordstown plant, further added to the fuel. That being said, the cost of the plant is pegged at $300 million, and Workhorse can only gather $25 million from its own reserves as things stand.
Now, WKHS stock might have declined without the trigger of any kind of bad news, but it may also be the case that many investors are now realizing that the USPS contract may not be going to Workhorse Group after all (decision’s still out).
On the other hand, it is also important to note that Workhorse Group has told the SEC that it is going to sell 15.7 million shares for a maximum price of $3.52. That could have come as a shock for existing stockholders since WKHS stock was currently trading at $4.20 earlier this week.
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