It was all about the electric vehicle market on Wall Street on Tuesday. The market is becoming increasingly obsessed about the no doubt massive impact EVs are going to have in the next five years. It is a game of musical chairs out there as investors try to figure out which EV makers are going to be defining the future for motor vehicles.
Oshkosh Corporation (NYSE:OSK)
There were winners and losers Tuesday and Oshkosh was a winner. The company landed one of the biggest contracts of the year for EV makers, securing a contract to supply the electric van for the US Postal fleet. This is a 10 year USPS contract worth $482m, so it is a biggie. Oshkosh Defense will be building at minimum 50,000 vehicles for USPS. The vehicles will be using either fuel efficient combustion engines or battery electric powertrains. Oshkosh stock has been on a good run, up from a low of $67 in October. It was trading just short of $110 at the time of writing following Tuesday’s surge. We are likely to see some short term profit taking on Wednesday although the stock was up +4.77% in the pre-market.
Workhorse Group (NASDAQ:WKHS)
As an electric vehicle maker, Workhorse Group should not be as vulnerable as it is proving to be. Stock fell off a cliff however on Tuesday when it lost out on the key US Postal Service contract. Shares were suspended several times amid high volatility in the market. It closed Tuesday off 47.5%. Fuzzy Panda Research was proved right: it flagged up issues with critical failures in the USPS prototype vehicles. Workhorse has steadfastly refused to comment on the problems, but the market is voting with its feet. This is a good demonstration of just how fickle EV investors can be when hopes fail to be fulfilled.
Tesla stock has now begun its inevitable sell off – there was simply a limit that it could be bid up to, and that limit seems to have been $883, as the stock price has found difficulty getting to $900 on more than one occasion over the last six months. A four day selling pattern has set in. Volumes have not been historically high for Tesla stock, but it is enough to take this darling of Robinhood’s merry men (and women) down from $816 to now crash under $700. It’s not over yet for Tesla shareholders, but a lot of bigger hitters are starting to take risk capital off the table, and given Tesla’s size, some of this is bound to be Tesla stock. Buy Tesla with extreme caution.
Square Inc (NYSE:SQ)
Square is right in the sights of what is starting to look like a sell off in tech stocks. Square has been a darling of investors, as it operates in the fintech sector and the fast growing digital payments market. Dan Dolev, an analyst with Mizuho Securities, lifted his price target for Square stock to $380, which is a street high. This is up from $300. Stock is on its way off a six month high of $267. At the time of writing it was at $256. There has been some heavy selling in the last two trading sessions with the market seemingly aiming for $241.