Reddit and WallStreetBets Might Take Canoo Stock to the Moon

EV (electric vehicle) stocks are featured regularly on Reddit group WallStreetBets. Along with larger EV stocks like Tesla and NIO, whose price is arguably difficult to influence, smaller EV names like Workhorse (WKHS) and Canoo (GOEV) have also been among the top discussions on WallStreetBets. Can Reddit take Canoo stock to the moon next after AMC Entertainment and GameStop?

Canoo is a startup EV company that went public through a SPAC merger in 2020. Several other EV startups, including Fisker and Lordstown Motors, went public through the SPAC route in 2020. However, all of them have crashed from their highs. Despite bouncing from the lows, GOEV stock is still down almost 55 percent from the peaks. Lucid Motors is the latest EV startup to go public through the SPAC route. Lucid Motors is expected to merge with Churchill Capital IV (CCIV) later this month.

On June 15, Canoo shared details about “its virus killing cabin climate control with Air Purifying qualities.” Canoo CEO Tony Aquila said “Covid-19 changed the way we think about health – and we're passing on that future proofing to our customers, and everyone that rides with them.”

Canoo has put an emphasis on lifestyle. Its first model named after the company is a lifestyle model. The second model will be a pickup truck. Currently, Canoo is in the pre-production stage but it expects to start deliveries in 2022, which it expects to scale up to 15,000 by 2023.

In contrast, Lucid Motors expects to start deliveries in 2021. The company is launching its luxury sedan Air, which will compete with models like Tesla Model S Plaid. Tesla has revamped the Model S Plaid ahead of the Lucid Air launch. However, the company ditched plans for the higher-end Plaid+ model because CEO Elon Musk thinks that the Plaid model is good enough.

GOEV stock is popular on Reddit and there's a subreddit with 2,800 members discussing it. A post on WallStreetBets, which was upvoted over 800 times, talked about a short squeeze in GOEV stock and set a target price of almost $50. The target price is nearly 5x the current price. The post put GOEV’s target price at $100 in the optimistic scenario.

The post also listed Canoo’s addition to the Russell 3000 Index and the upcoming investor relations day, which is scheduled for June 17, as positive triggers. The two look like positive triggers. EV companies have used these “days” whether termed as “battery days” “NIO day” “power day” or “investors day” to release important updates. Usually, EV stocks spike after these “days”

According to the data from Fintel, GOEV stock has a short volume ratio of 35 percent as of June 16. This is the highest short volume ratio for the stock in June. There could be a short squeeze in GOEV stock especially with the investor day just around the corner.

Wall Street analysts have a divergent view on Canoo stock. Among the three analysts polled by TipRanks, one rates it as a buy, one rates it as a hold, and one rates it as a sell. The stock’s average target price of $10.33 is a 6.5 percent downside from current levels.

All said, with the upcoming investors day, high short interest, and the possibility of pumping from Reddit groups, GOEV stock could rise from these levels in the short to medium term. However, the company needs to execute the production and delivery plans in the long term.