Electric vehicle startup Canoo (GOEV) has taken decisive action to safeguard its NASDAQ listing by announcing a 1-for-23 reverse stock split as its share prices hit a new all-time low. The reverse stock split, scheduled to go into effect on March 8, 2024, before the market opens, is aimed at bolstering the company’s share price and ensuring compliance with NASDAQ’s minimum per-share requirement of $1.00.
For existing shareholders, the reverse stock split means that every 23 shares of Canoo stock will be combined into one share. For example, if an investor owns 230 shares of GOEV stock, they will now have ten shares when the market opens on March 8. Importantly, while the number of shares will decrease, the ownership stake in the company will remain the same, except for any price fluctuations.
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Canoo’s decision to implement the reverse stock split comes as the company seeks to regain compliance with NASDAQ’s minimum share price rule, a crucial step in maintaining its listing on the exchange. To regain compliance, Canoo’s shares must trade above the $1.00 minimum for ten consecutive days by March 25.
The move is also strategic for Canoo’s future fundraising efforts, as a higher stock price can make it more attractive to potential investors. This will be particularly important for Canoo as it continues to ramp up production and expand its product lineup.
Despite narrowing losses in Q3, with a reported loss of $112 million, Canoo’s financial challenges remain significant, with total losses reaching $273.6 million for the first nine months of 2023. The company is set to provide further insight into its financial performance when it reports its Q4 and full-year 2023 earnings later this month.
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On the operational front, Canoo has made notable progress, with deliveries of its commercial electric van commencing last month. While vehicles have been delivered to entities such as the US Army and NASA for testing, the recent purchase of six LDV 190 delivery vans by USPS underscores growing interest in Canoo’s offerings.
The sighting of Canoo’s electric “American Bulldog” pickup truck near its Oklahoma City manufacturing facility indicates ongoing advancements in its product development pipeline, hinting at a promising future for the EV manufacturer.
