Buckle Up: With a Short Interest of Around Two Times That of AMC, the Ongoing Short Squeeze in Workhorse (WKHS) Shares May Result in a Case of Seller’s Remorse for ARK Invest’s Cathie Wood

Workhorse (NASDAQ:WKHS), an Ohio-based manufacturer of electric utility vehicles, is experiencing an explosive brusk squeeze currently, thereby restoring much-needed conviction in the prospects of the stock.

Equally per the tabulation by Ortex, Workhorse currently has a brusque interest (SI) of over 27 percent of its unabridged bladder. For context, this level of SI is around two times that of AMC Entertainment (NYSE:AMC), which has been the focus of a retail-driven brusk squeeze over the past few days. Specifically, AMC's short interest has really declined from around nineteen percentage of its float last week to the current level of around 14 percent. Meanwhile, Workhorse'south SI has also declined from around xxx percent on Friday. Nonetheless, the present level of SI remains elevated, thereby ensuring a connected surge in Workhorse shares.

Despite the ongoing stock surge, which allowed the stock to surge over 35 pct in the past week, the fundamental narrative effectually Workhorse has not changed. To wit, expectations around Workhorse becoming a key node in US Postal Service's (USPS) Next-Generation Delivery Vehicles (NGDV) contract had spurred a dramatic 900-pct-plus rally in the stock last twelvemonth. All the same, back in February, USPS awarded the entirety of the x-year, $6 billion contract to Oshkosh (NYSE:OSK), thereby precipitating a brutal plunge in Workhorse shares. All the same, to the consternation of many Us lawmakers, only 10 percentage of the Oshkosh contract consisted of electric vehicles. Following a sizable backlash, Postmaster General Louis DeJoy had told members of the Firm Appropriations Committee's financial services and general government subcommittee that the USPS would procure boosted electric vehicles if the Congress were to furnish more resource. Thereafter, back in May, over 50 U.s.a. Business firm Democrats have now penned a letter to urge House Speaker Nancy Pelosi equally well as the White House to sanction a proposal that would allocate around $eight billion for the electrification of the The states Postal Service (USPS) fleet, with Workhorse expected to win a sizable pie of this new government contract.

Readers should annotation that a sizable element of risk will still prevail over Workhorse fifty-fifty if it manages to win an additional contract for the electrification of the USPS. As an illustration, Workhorse is expected to rely on the manufacturing prowess of Lordstown Motors (NASDAQ:RIDE) to fulfill its contractual obligations. All the same, Lordstown'due south own Endurance electric truck is faltering amid allegations of an inflated order book and the truck catching burn down during testing.

This brings u.s. to the crux of the affair. Cathie Wood'south ARK Invest had maintained a sizable position in Workhorse over the past couple of months. Despite the stock plunging dramatically from its zenith, Cathie Forest kept adding to her position. However, it seems that merely ahead of the current dramatic reversal in the stock's prospects, Cathie Wood liquidated the entirety of her Workhorse stake. Of course, this 'purchase loftier sell low' kind of move is expected to result in a substantial instance of "seller'due south remorse" for ARK Invest. Forest is on the record that she invests over a 5-yr fourth dimension horizon. It is precisely for this reason that nosotros find ARK Invest's volte-face quite surprising. After all, Workhorse'due south primal shortcomings accept never been a secret. Hopefully, the fund would be much more circumspect in doubling downwards on its existing positions going forward or take chances a repeat of its chronic underperformance earlier this year.

Source: https://wccftech.com/buckle-up-with-a-short-interest-of-around-two-times-that-of-amc-the-ongoing-short-squeeze-in-workhorse-wkhs-shares-may-result-in-a-case-of-sellers-remorse-for-ark-invests-cathie/

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