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SOLO stock has price target cut at Roth

SOLO stock

Following the announcement of a merger, Roth MKM analyst Craig Irwin has lowered his price target on Electra Meccanica Vehicles (Electra Meccanica Vehicles Stock Quote, Chart, News, Analysts, Financials NASDAQ:SOLO).

On January 11, SOLO announced it would merge with rival electric vehicle manufacturer Xos, Inc.

Susan Docherty, Chief Executive Officer of ElectraMeccanica, added, “In my last shareholder update, I stated that nothing was a higher priority than finding the right partner for us to create and re-accelerate shareholder value. We believe the proposed combination with Xos would achieve our management team’s objective to generate revenues, achieve credible long-term profitability and improve shareholder value. Today, we couldn’t be more pleased with the proposed combination with Xos, given its clear track record as an EV OEM with industry-leading gross margins; its proven ability to service demanding, large-fleet customers like FedEx Ground, UPS and Loomis; and its talented, disciplined management team.

The analyst summarized the development.

“ElectraMeccanica and Xos, Inc. announced a merger agreement to leverage the combined strengths of each company,” he wrote. “SOLO and Xos announced an agreement where Xos will acquire all outstanding shares of SOLO in an all-stock transaction. The merger is expected to close in 1H24, pending shareholder approval, and following completion of the deal, SOLO shareholders will own around 21% of the combined company. Xos, a manufacturer of electric trucks, has delivered over 600 units since 2020, including 110 delivered in 4Q23, and has a Tennessee facility with a peak capacity of 5k units/year. The combined Board of Directors will include six designated by Xos, and three by SOLO”

In a research update to clients January 12, Irwin maintained his “Neutral” rating on SOLO but cut his price target from $0.50 to $0.40.

“The lower target reflects anticipated cash of $48m at the closing of the merger agreement, where downside support should come from the cash on the balance sheet,” the analyst explained.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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