wkhs-stock-drops-on-reported-sec-probe-of-ev-startup

WKHS Stock Drops On Reported SEC Probe Of EV Startup

The Securities and Exchange Commission has reportedly launched an investigation into EV truck maker Workhorse Group (WKHS). WKHS stock fell.




X



The Wall Street Journal reported Wednesday that the SEC probe involving Workhorse, an early investor in embattled EV startup Lordstown (RIDE), was alluded to in a denial letter for a Freedom of Information Act request.

Neither the report nor the letter specified a reason for the probe.

Meanwhile, Lordstown is also under investigation by the SEC and the Justice Department. The probes are looking into the terms of its IPO last fall and how it reported preorders for its electric pickup truck, the Endurance.

Workhorse dumped its 11.9 million shares of Lordstown, recording a loss of $52.1 million, according to its second-quarter earnings report on Aug. 9.

Workhorse Stock

Shares fell 6.8% to 9.14 on the stock market today. WKHS stock reached an all-time high of 42.96 on Feb. 4, according to MarketSmith chart analysis. But the stock gapped down 47% to 16.47 on Feb. 23, after it lost a $6 billion deal with the United States Postal Service.

The USPS was seen as one of three major potential Workhorse customers, with United Parcel Service (UPS) and FedEx (FDX).

Workhorse has struggled to meet targets and remain afloat. In July, it stepped back from earlier guidance to deliver 1,000 vehicles in 2021. The company reported it had sold just 14 vans in the second quarter.

As a result, Workhorse has weak fundamentals. Its RS Rating is just 5 out of a best-possible 99. Its EPS Rating is 26.

Its relative strength line is flatlining after diving in February.

RIDE stock retreated 1.2%.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.

YOU MAY ALSO LIKE:

Is UPS Stock A Buy Now?

Is FedEx Stock A Buy Right Now?

Why This IBD Tool Simplifies The Search For Top Stocks

Want To Get Quick Profits And Avoid Big Losses? Try SwingTrader

How To Know It’s Time To Sell Your Favorite Stock