Why EV Maker Canoo's Shares Plunged Monday
Investors crushed the shares of electric vehicle (EV) start-up Canoo (NASDAQ: GOEV) Monday after details emerged of its latest round of raising capital. The stock dropped by more than 20% before paring that loss. As of 10:43 a.m. ET, Canoo shares were still down by 11.7%. Shareholders have now absorbed a loss of more than 80% over the last 12 months.
Today's drop comes after the company said it would raise more than $50 million by selling new shares to institutional investors at a discounted price. The company will bring in $52.5 million by selling shares to certain investors at $1.05 per share. That compares to Friday's closing price of $1.25 per share. The move substantially dilutes existing shareholders, as additional warrants could result in up to 100 million new shares.
Source Fool.com
