Workhorse Group (NASDAQ:WKHS) announced on Monday that it has signed a new exclusivity agreement with a privately held U.S.-based electric commercial vehicle manufacturer. The stock gained after the update. This agreement relates to ongoing merger discussions previously disclosed by the company.
- WKHS stock is on the move, climbing higher. Check the latest price here.
Also Read: Workhorse Rebounds After Nasdaq Scare, Stock Up 15%
Why This Agreement Could Change Everything For Workhorse
Workhorse is negotiating a potential deal to merge the manufacturer into a newly formed subsidiary in exchange for newly issued shares of Workhorse common stock.
On July 14, Workhorse stock tanked 21% after it signed the original exclusivity agreement, which barred it for 14 days—subject to a customary "fiduciary out," from sharing information, negotiating, or signing a deal with third parties involving an alternative transaction.
Is Workhorse’s Stock Recovery Sustainable?
Workhorse aimed to keep its Nasdaq listing, pending regulatory and shareholder approvals. The talks also included a plan to refinance $33 million in outstanding convertible notes through a new note, a $20 million sale-leaseback of its Indiana facility, and a share exchange involving 3 million new shares to be issued to an institutional investor. That agreement expired on July 28.
On Monday, Workhorse reinstated those restrictions by entering into a new exclusivity agreement, which will remain in effect for seven days.
Workhorse stock plunged over 81% year-to-date as it failed to reach the revenue consensus estimate in the last two quarters and the EPS estimates in the last quarter, reflecting ongoing challenges in the electric vehicle market.
WKHS Price Action: Workhorse shares were up 4.47% at $1.72 at the time of publication on Monday, according to Benzinga Pro.
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