Canoo Stock Hits All-Time Low During Plans for Second Reverse Stock Split in 2024
Shares of Canoo took a significant hit, dropping to a record low of $0.35 on Thursday as the company moves forward with plans for a second reverse stock split in 2024. This news comes after the recent disclosure that Canoo had only $700,000 in cash and cash equivalents as of November 6, which may only cover about a month’s worth of expenses based on their cash burn rate.
Unfortunately, this led to a further decline in Canoo’s stock following the delay of their annual shareholder meeting due to insufficient votes to pass key proposals, including the reverse stock split. This split is essential for Canoo to meet Nasdaq’s requirement of trading at or above $1 per share.
Although Canoo’s Board of Directors expressed confidence in the proposals outlined in the proxy statement, there is still uncertainty surrounding the company’s financial stability. Recent SEC filings revealed that Canoo issued over 7.1 million shares of its common stock to raise approximately $2.87 million in funds to pay off suppliers and vendors.
In terms of financials, Canoo reported that its cash and cash equivalents were at $1.5 million as of September 30. However, their cash reserves dropped to $700,000 by November 6, indicating a rapid decline in available funds over the first few weeks of the quarter.
To address their financial situation, Canoo secured a $12 million revolving credit facility with AFV Management Advisors, LLC, founded by the company’s CEO, Tony Aquila. This move aims to provide Canoo with additional capital to navigate their current financial challenges.
Although Canoo is facing financial turbulence, the company continues to press forward, seeking shareholder approval for crucial measures while also focusing on strategic partnerships and financial solutions to weather this storm. As the situation evolves, stakeholders will be closely watching Canoo’s next moves to ensure the company can navigate these challenging times successfully.
