Canoo’s Lifestyle Vehicle electric minivan.
Source: Canoo
Shares in the launch of electric vehicles canoe were significantly lower in early trade Monday after the company announced it had agreed to sell discounted shares to raise $52.5 million.
Canoo shares closed at $1.09 on Monday, down over 12%. The stock has lost more than 80% of its value over 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 giving investors the option to buy up to 50 million more. Investors are paying $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 transaction.
The transaction price is a significant discount as Canoo shares closed at $1.25 on Friday. For current shareholders, the transaction will also represent a significant dilution of their holdings as it will add between 50 and 100 million shares to the company’s current outstanding shares of 356 million.
Canoo said in November that it was running out of cash and expected to raise funds by issuing new shares. At the end of the third quarter, it had just $6.8 million on its hands.
Canoo said Monday it would use the net proceeds of the offering for “general working capital purposes.” The company is expected to report fourth-quarter results later this month.
A 5-day chart of Canoo stock.
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