Workhorse sinks 20% after Postal Service again delays vehicle contract - InvestingChannel

Workhorse sinks 20% after Postal Service again delays vehicle contract

Shares of Workhorse Group (WKHS) are sinking after the United States Postal Service delayed again its contract for 165,000 next generation delivery vehicles. “Amid continuing COVID-19 concerns, and in order to provide for capital investment activities and required approvals, the program schedule has been revised and a decision is now planned for quarter 2 of fiscal year 2021,” Kim Frum, a spokesperson for the Postal Service, said in a statement to Trucks.com on Tuesday. Shares of Workhorse are down 21%, or $5.32, to $19.91 in premarket trading. The USPS told Roth Capital on October 13 that a decision would be made by the end of 2020, the firm’s analyst Craig Irwin told investors in a research note. Irwin believes that the longer the contract is delayed, the greater opportunity competitors to Workhorse have to show the USPS other electric vehicles. Workhorse has been the front runner for the $8.1B contract, but Oshkosh (OSK) and Ford (F) have already shown the USPS an alternative vehicle solution, according to Irwin. Further, the analyst thinks the incoming Biden administration will want to evaluate the contract “to know it isn’t going to a Trump political favorite.” This could push the contract closer to mid-2020, he says.