Faraday Future, Canoo (GOEV), Nikola short squeeze intensifies

By:
on Mar 22, 2024
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  • Canoo’s share price has surged by more than 200% from its lowest point this year.
  • Other companies like Faraday Future and Nikola have also spiked.
  • This surge is mostly because of the ongoing short-squeeze among penny stocks.

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Faraday Future (NASDAQ: FFIE), Canoo (GOEV), and Nikola (NKLA) stock prices continued their short-squeeze this week even as concerns about the EV industry intensified. Nikola jumped to $0.6574, 11% above its lowest level this month.

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Faraday Future share price surged by more than 48% on Thursday and continued its uptrend in the extended hours. It soared by over 5% in the post-market session and soared to its highest point since March 8th of this year.

Canoo, on the other hand, soared to $4.8, its highest level since February 1st. It has been one of the best-performing companies in the past few days. It soared by almost 300% from its lowest level this year, giving it a market cap of over $247 million. 

This short squeeze happened even as other EV companies continued plunging. Li Auto, the giant Chinese EV company crashed by more than 10.8% on Friday after it warned about its growth. Similarly, Nio, Xpeng, Mullen Automotive, and Rivian have all retreated.

It is unclear why Faraday Future stock price has surged hard this week since it has not made any headlines in the past few days. As such, this could be just a short squeeze considering that the company is in deep trouble.

It recently had to recall its vehicles, a process that could lead to substantial costs at a time when its cash burn is increasing and its cash on hand is deteriorating. The most recent financial results showed that Faraday had $61.8 million in cash, which is minimal for a company that lost over $78 million in the last quarter.

Canoo stock, on the other hand, has short-squeezed after the company’s Oklahoma facility was approved as a foreign trade zone, as I wrote here. This approval allows the company to save over $70 million in vehicle costs. The company also has some solid orders from organisations like NASA and Walmart.

Nikola stock price has also bounced back in the past few days. Like Faraday Future, there has been no reason for the ongoing rebound. A likely reason is that the company appointed Thomas Okray as the CFO. He came from Eaton, the giant industrial company.

The main risk for these companies is that these companies are all burning cash with no end in sight. Nikola lost over $966 million in 2023 while Canoo had a net loss of over $300 million. Faraday Future lost over $500 million. 

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