Workhorse extends June rally to 706% after securing $70 million in new financing
- Workhorse surged as much as 38% on Tuesday after the company secured $70 million in new financing.
- The jump extended the electric vehicle maker's June rally to as much as 706%.
- Workhorse was added to the Russell 3000 index on Monday and is part of a group of publicly traded electric vehicle companies that have seen a surge in trader interest as investors try to find the next Tesla.
- The number of Robinhood account owners that own Workhorse surged 436% in June to 116,000.
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Workhorse extended its June rally to 706% and surged as much as 38% on Tuesday after the electric vehicle developer said it secured $70 million in new financing.
This follows Monday's 56% surge after the company announced it would be added to the Russell 3000 index.
Workhorse said it entered into a financing agreement for a $70 million senior secured convertible note with a single institutional investor. According to the company, the proceeds will strengthen its balance sheet and enable it to accelerate production of its vehicles.
CEO Duane Hughes said, "Heading into the second half of the year, we'll be looking to meet our previously stated annual delivery target, which should have us in a strong position to accelerate our production ramp into 2021."
Workhorse develops electric delivery vans that are targeting delivery companies like UPS, FedEx, and DHL. The company also operates an aviation unit that makes delivery drones. Previously, the company developed an electric pickup truck but abandoned that project after it proved too costly for the company to develop.
In 2019, Workhorse licensed its electric pickup truck technology to its former CEO, Steve Burns. Burns formed Lordstown Motors and acquired an auto manufacturing facility from General Motors in Lordstown, Ohio.
Workhorse retains a 10% equity stake in Lordstown Motors and is set to receive a royalty fee for every Lordstown Endurance pickup truck that is sold.
The investor hype surrounding electric vehicles has been inspired by Tesla's meteoric rise past $1,000, and spilled over to Nikola Motors, which began accepting a $5,000 reservation for its Badger electric pickup truck today. Investor hype was so strong that Nikola shares doubled in a single day after it went public via a reverse merger earlier this month.
Workhorse has seen its market capitalization skyrocket from $185 million at the start of June to $1.26 billion today, according to data from YCharts.com.
