Workhorse Group (NASDAQ:WKHS) Sees Continuous Selling Pressure: What Next?
7:51 am Saturday, July 17th, 2021
Electric delivery vehicle manufacturer Workhorse Group (NASDAQ:WKHS) had been the toast of the stock market back the latter half of 202 and the first few months of this year.
The reason behind the optimism was tied to the fact that Workhorse Group was in the running for bagging the massive United States Postal Service contract worth billions of dollars for replacing its old delivery vehicles. Eventually, it came down to two other companies and Workhorse. In addition to that, speculation emerged that Workhorse was the favorite to land the contract that could instantly catapult the company into the big time. More importantly, two other companies in the running were Oshkosh, which is better known for military vehicles and Karsan, which is a Turkey-based company.
Hence, the optimism among investors was perhaps understandable. However, the contract was eventually awarded to Oshkosh on February 23 and that development alone knocked the wind out of the sails of the Workhorse stock. On that very day, the Workhorse stock tanked hard and went from $30 a share to $15 a share.
However, since June, the stock has been in a phase of recovery. One of the factors driving the rise is the considerable short interest in the stock at this point and thereby making the stock susceptible to a short squeeze. Additionally, the company challenged the decision to award the USPS contract to Oshkosh through a complaint filed at the United States Federal Court of Claims. Such legal proceedings may take a long time and it is highly unlikely that it is going to be reversed. Hence, any optimism about the Workhorse stock at this point might be misplaced.
