Canoo’s Lifestyle Vehicle electric van.
Source: Canoo
Electric Vehicle Startup Actions Canou were down sharply in early trading Monday after the company announced it had agreed to sell shares at a discount to raise $52.5 million.
Shares of Canoo closed at $1.09 on Monday, down more than 12%. The stock has lost more than 80% of its value in the past 12 months.
Canoo said in a statement that it has reached agreements with institutional investors to sell 50 million new shares, along with warrants that give investors an option to buy up to 50 million more. Investors pay $1.05 per share, and each share comes with a warrant exercisable at $1.30 per share.
Canoo did not name the institutional investors involved in the deal.
The price of the trade is a substantial discount, as shares of Canoo closed at $1.25 on Friday. For current shareholders, the deal also means a significant dilution of their holdings, as it will add between 50 million and 100 million shares to the company’s current number of outstanding shares of 356 million.
Canoo said in November it was cash-strapped and planned to raise funds by issuing new shares. It only had $6.8 million at the end of the third quarter.
Canoo said on Monday it would use the net proceeds of the offering for “general working capital purposes.” The company is expected to release its fourth quarter results later this month.
A 5-day chart of Canoo stock.
