First, credit to u/Forestur for the tipoff here: https://www.reddit.com/r/wallstreetbets/comments/qs0l9c/goev_canoo_earnings_report_speculation/. Without his initial work, this opportunity might have slipped right by.
Who is Canoo / GOEV?
Canoo is an electric vehicle company designed around a subscription or lease model. This is because their core technology is an EV drivetrain with interchangeable bodies. https://www.canoo.com/platform This kind of business model is great for fleet vehicles and long term maintenance. Businesses can order and return cars as needed, and canoo can refurbish or swap the body section to make the car ready for the next customer. Critical motor or battery problem under warranty? Swap the body to a new platform and roll back out with minimal downtime. I have been bullish on Canoo since day 1 and FOMO’d in hard as soon as I heard about the SPAC deal. It’s got a fucking window by your feet so everyone can see your wife’s hot legs while she’s out with her boyfriend.
Unlike the cars you can buy today which need to be stripped for parts, the Canoo business model is going to completely change the way people think about a new or used car. Did you know modern cars get totaled by hail? What a piece of shit. If you have a canoo your MPP is untouched and you just need your cabin swapped out. If their business needs to move between providing pickups, passenger vans, delivery vans, and luxury sedans, Canoo can do all of this easily.
Look at how much effort it takes Ford or Tesla to create a new vehicle type, Canoo is going to turn this on its head. This is the same kind of tech Rivian has, and Rivian has 50x the valuation. Rivian has only delivered maybe 75 trucks, Canoo will deliver 1500 cars next year.
Speaking of car delivery, Canoo is working with VDL, who makes cars for people like BMW, to do their early phase manufacturing; and they just got Oklahoma to give them $300M in incentives to build out a factory. After the 1500 vehicles next year, Canoo and VDL are contracted for 20,000-25,000 vehicles in 2023 (while Canoo builds out the OK factory). These guys are on track to be a major domestic player, but based on previous calls they’re very bullish on international markets since other countries are very serious about forcing a transition to EVs. The reason I’m heavily invested in EV tech is because the requirement to transition is global, not just exclusive to rich people in California.
They’re also smart and flexible. You know how new vehicle sales are lagging because semiconductors are hard to source?
[We have] consolidated our Electrical Architecture into a narrow set of controllers using fewer chips. Fewer parts overall mean we believe we are less exposed to global supply chain disruptions.
You should want to get in on this stock as an incredibly cheap play on great EV tech, just buy some shares and thank me later.
What is going on with this company’s stock?
As we know, the market is completely irrational, especially when it comes to EVs. GOEV is not delivering cars until basically a year from now, so their value is still highly speculative, as a result, the value has been driven more by shorts and hedgies than by catalysts.
The history of shortshttps://www.nasdaq.com/market-activity/stocks/goev/short-interest
As soon as the DA was announced, people started shorting the stock. Fuck shorts, they hate the little guy. From reading the nasdaq data and running my own crayon-level estimates, the shorts had the following positions open at the beginning of the year:
Since the beginning of the year the shorts have tripled down, with the following notable buying periods:
Given the available data on the number of closed positions, I’ve estimated the open shorts at something like
GOEV – Shorts run this town
Let’s look at the data we have on shorts for the last year and see how their behavior has affected the stock price. I know we try not to say that correlation is causation, but when shorts move at least 800,000 shares, the share price responds, often by spiking up or down by $1.50-3, with the largest correlated move over $6, when shorts sold 8 million shares and the price tanked.
From March 15 thru June 30, shorts behavior is driving the share price: big sales drive the price down, and when a significant number of positions are closed the share price rebounds. From July 30 thru Oct 29, any time shorts move 800k+ we see a direct correlation, while periods of limited short behavior continue a very slow trend down (lack of positive catalysts for the company, it makes sense).
Let’s go over that key information again: increased volume of 800,000 – 8,000,000 shares through hedgie has regularly driven the share price with a correlated impact of $1.5-$6.6. This stock price is very sensitive to volume, and whenever shorts stop beating it down, it shoots up.
What’s going on this week?
Two things are happening. First, there will be an earnings report TONIGHT (Monday), and this could introduce a catalyst that drives the share price up or down. Tony Tequila is gonna bring the good news and put us on the launchpad. From the horse’s mouth: “we will teach people not to short our stock.” Second, a lot of options are expiring this week, with between 900,000 and 6.3M shares expiring ITM between calls and puts. Our win here involves the closing contracts creating pressure to buy shares, which drives the price up, putting more contracts ITM, and creating a feedback loop. There are currently over one million shares due with ITM contracts, this is already a statistically significant volume.
What’s going on with the shorts?
Shorts are uncertain. They put out over 2 million shares when the price was under $8, but also closed 4.6 million shorts in the same time frame. When shorts closed their positions the stock rocketed up, it seems like they can’t push it much harder, or aren’t hungry to. Most of the shares are shorted between $9 and $13 which is making the shorts ITM and feeling bullish, but it seems like the stock has strong support for rebounds whenever the shorts let up on pressure. We want the stock over $13, putting the hedgies underwater on their bets and turning the heat up. If they panic and close, the stock pops. We are still near ATH shorted amounts, but the stock has been running up.
Are there other factors?
Insiders hold over 50% of the company, and they are not fucking selling, which is an extremely positive sign. (https://www.nasdaq.com/market-activity/stocks/goev/insider-activity)
OK, OK, but what is the fucking play?
Shares and calls. No warrants. Shares because we need to eat up the bid/ask and calls because we need to drive pressure to deliver shares. (Also these 10 cent contracts are the ticket to tendietown) If we can get this to $10 it jumps, to $12.50 and it explodes. Remember that every 800k shares is significant: At $9, 1.2M shares are due; at $10 it’s 3M, then there’s a gap to $12.50 4.25M, and at $15 it’s 5.1M shares. The shorts have been working super hard to keep this under $9/share. If we get over $9 keep buying and it flips their leverage. We have already climbed from $6.99 to $9 this month, we can push it back to $9 and then load up with 💎🤲💎. Once we moon buy every dip to build support.
Best case scenario, it’s already inevitable and we’re at $25 by Friday. Worse case scenario we need to drive 400k+ shares to give this bad boy a 50c boost. That’s 4000 apes in for 100 shares each. Worst case scenario the hedgies short another $100-200M in shares and we have to fucking buy through it but they don’t have the balls because this company is about to moon. You don’t short Tony Tequila.
We will push all the shorts underwater. Let’s look at the estimates again:
Right now, about 4M shorts are underwater with shares shorted under $8.50. If we get this to $10, that number goes to 16M shorts underwater. At $11 it’s over 20M shorts, and above $12.50 over 25 million shorted shares will be upside down. This is not an infinite squeeze, but it’s got a lot of potential to run.
Tl;dr – Shorts want the bangbus to fail, we want the bangbus to 🚀🚀🚀. Buy GOEV shares, ITM calls, ATM calls. Good news tonight, we ride at dawn!
8c, 10c, 11c, 11/19-December let's run this up.
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