USPS decided not to go with Workhorse (WKHS) after all? – Idaho Reporter

Automotive

USPS decided not to go with Workhorse (WKHS) after all?

Everyone who is anyone was expecting some kind of news on Monday morning when it comes to Workhorse (WKHS) stock.

It was widely expected that USPS contract decision will take place on October 13, but Workhorse today announced that it has entered into a note purchase agreement under which it will sell almost $200M aggregate principal amount of its 4.0% Senior Secured Convertible Notes due 2024 to two institutional lenders.

The money they get today (or in the days to follow) will be used “to increase and accelerate production volume, advance new products to market, replace previous higher cost financings, and support current working capital and other general corporate purposes”.

To many investors this looks like WKHS got the USPS contract as, according to this announcement, they are accelerating production volume. But in my eyes this looks like this.

USPS really liked their vehicle, they think how they have a great product, but at the end of the day USPS cannot risk awarding 165,000 vehicle order to a company with 400 vehicle deliveries per year. So, people at WKHS decided to show that besides know-how they also possess capacity for big orders.

On top of this,at the moment Workhorse seeks 8 new employees.

Maybe I am wrong, and WKHS will not go down to $10, but something is telling me that USPS bosses are not looking in the future the way Bezos is, when he decided to go with Rivian. Because Amazon was unable to find suitable electric vans as a result, the online giant got involved in the electric vehicle start-up and Tesla competitor Rivian from Plymouth, Michigan. After all, Bezos is a fan of pragmatic solutions and in a few days we will see what is going on at USPS heads.

1 Comment

  1. Patrick Stitt

    Misleading title, your opinion (or hope) with no facts to back it up… Smells like short seller who is getting squeezed.

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