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Canoo Inc. (NASDAQ:GOEV) shares are trading lower in the premarket session on Thursday.
The company is grappling with major financial challenges, leading to the furlough of 82 employees and the temporary shutdown of its factories in Oklahoma.
The move comes as the electric vehicle manufacturer works to secure the necessary capital to continue its operations.
Canoo is currently in advanced discussions with multiple capital sources but acknowledges the tough decision to furlough staff, particularly during the holiday season. The company expressed hope of bringing employees back once its financial situation stabilizes.
Canoo said, “We regret having to furlough our employees, especially during the holidays, but we have no choice at this point. We are hopeful that we will be able to bring them back to work soon.”
In its third quarter reported in November, the company revealed a quarterly cash outflow of $31.3 million, down 20.7% from the second quarter and down 58.6% on a year-over-year basis.
As of the end of the third quarter, the company had $16 million in cash, cash equivalents, and restricted cash. Canoo is focused on consolidating operations and reducing costs, which includes a shift in its manufacturing footprint from California to Texas and Oklahoma, the company said in a release dated November 14.
This restructuring is expected to save the company $12 million to $14 million annually.
“This will continue to be a difficult and critical period as we do everything we can to get the capital in place, bring jobs back online, and get back on track with our step-level manufacturing plan,” said Tony Aquila, Investor, Executive Chairman, and CEO in November.
Price Action: GOEV shares are trading lower by 6.59% to $0.1177 premarket at last check Thursday.
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This article Why Is Penny Stock Canoo Falling On Thursday? originally appeared on Benzinga.com
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