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Canoo ($GOEV) – The EV Manufacturer that’s ready to take shorts for a ride (healthy balance sheet, 30% short interest, 0.15% float left available to borrow at 24.5% fee, up to 11 days to cover – upcoming investor conference and Russel 3000 inclusion catalysts could send this flying)

Good morning gamblers,

For a brief overview – Canoo is a Los Angeles-based company that has developed breakthrough electric vehicles, with over 300 employees from leading technology and automotive companies. link Their unique selling point is a modular platform purpose-built to deliver maximum vehicle interior space and adaptable to support a wide range of vehicle applications for consumers and businesses. This ‘skateboard’ platform is largely what drew Apple’s interest. The platform is different from ones developed by other startups and larger automakers because it integrates more of the car’s electronics, allowing for greater flexibility in cabin design. It also features steer-by-wire technology, which also increases design flexibility and is not yet widely adopted in the industry. link

Canoo is bringing its first vehicle to market next year with its electric microbus/van available at a base price of $34,750 before tax incentives or add-ons. It’s now taking preorders in the United States for the “lifestyle” vehicle, as well as for its round-top pickup truck and multi-purpose delivery van. Canoo is taking a different route than many other electric vehicle manufacturers, which played a role in the interest from Apple and Hyundai. Canoo’s trio of vehicles all have the same proprietary “skateboard” platform architecture that houses the batteries and electric drivetrain in a chassis that sits under the vehicle’s cabin. This contributes to a similar design language between the vehicles, which all have the same wide front windshield and relatively low profile. link

A quick glance at its balance sheet shows that they aren’t at risk of running out of cash anytime soon. Their total assets are $717.8M (of which cash and cash equivalents are $641.9M) and total liabilities are $107.6M (of which long-term debt is $6.9M).link

Does it meet key conditions for a squeeze?

  1. High short interest: Yes, ~29.7% short interest link

  2. Low float: Yes, total float of 99.9M. 58.2% shares outstanding being held by insiders and 9.9% shares outstanding being held by institutions (23.7% of float) link.

  3. Decent volume (also because of the high short interest there's a medium-high short ratio): Yes, Nasdaq has the avg. daily share volume at 2.6M, link, Yahoo Finance has previous volume at 3.8M and average volume at 5.4M link, marketwatch has the average at 5.59M link.

  4. High short ratio: Yes, based on the volume numbers above – we’re looking at anywhere from 5.3 to 11.3 so shorts really shouldn’t be able to cover within the week, possibly even two weeks. shortsqueeze 5.3 link and Nasdaq 11.3 link

Additional points

1.There’s room to run – a squeeze would not initially be setting an ATH since the stock is currently down 51.5% link from its ATH with a market cap of $2.3 Billion. This is primarily due to an overhaul in management as well as a change in the business model which favored protecting Canoo’s IP instead of providing it to other OEMs, still ended up bring the SP down short-term since it was radically different from when they went public.

2.Shorts running into a wall – 150,000 shares are left available to borrow at a rate of 24.5%, which is 0.15% of the entire float so shorts are about to hit a wall in terms of how easy it is to manipulate the share price. link

3.Possible PT – unlike all the other information which is part data part speculation, this is pure speculation since we're talking about pre-revenue but I really think you could easily 10x the current share price if it’s a momentum based squeeze since it's a short-term event that isn't based on technicals. Valuations based on fundamentals aren’t really the same as they were a couple of years ago, and given the low interest rate / easy access to cash the question really is how high can it go? Since institutions don't hold the majority of the float (they currently only hold ~24% of the float but have increased their position by ~120% in the last month) and there should therefore theoretically be a smaller likelihood of shenanigans with lower price manipulation, this could easily 10x the current share price to $100 if more retail become aware of the company's potential and buy-in to their long-term vision, and additional institutions start buying in. Personally speaking, I like to look at market caps to see how high things can go – with GME and AMC both were hovering under a $20 Billion market cap before AMC blew open the gates a couple of weeks back. Other tickers that went up in the last week like WISH and CLOV however hit around a $10 Billion market cap before coming back down. If we use that $10B market cap to be conservative, that still gets us to almost $50, which is 5x the current share price – and since you can make a case for Canoo’s short interest being higher than the previous two cases, I don’t see why it couldn’t reach that by the end of the month, or even within a week if shorts start to cover and bring the house down.

Upcoming catalysts

  1. Upcoming investor day this Thursday (June 17th), which will be a ‘hybrid in-person and virtual journey into Canoo’s product portfolio and business strategy.’ link

  2. Canoo is being added to the Russel 3000 index, link meaning that the stock along with other additions could be expected to ‘trade more than their average daily volume in the Nasdaq Closing Cross on June 25, and some will trade an entire week’s volume on “Russell Friday”.’ link.

On a final note, this is not financial advice so please don’t treat it as such – do your own due diligence, read your own news, study their financials and evaluate multiple perspectives (bullish and bearish) to see what others are saying. Don’t invest money you’re not willing to lose, and do so at your own risk.

TLDR: Canoo is among the healthiest EV startups out there, $641.9 million in cash, only $6.9 million in long-term debt and a market cap of just $2.3 billion with a <$10 share price. This is the company that Apple wanted to buy and Hyundai wanted to partner with. Other EVs have the same market cap and may not even have the cash to make it through the next 3 months so Canoo really should be trading at multiples of where it is atm. Price is trending upwards – 11.8% in last week, 32.9% in last month – someone’s been loading up while it’s cheap (institutional ownership is up 119.2% over the last 3 months). Position – 1k shares @ 11.60.

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