April 02, 2021 - An investor in shares of Canoo Inc. (NASDAQ: GOEV) filed a lawsuit in the U.S. District Court for the Central District of California over alleged violations of Federal Securities Laws by Canoo Inc. f/k/a Hennessy Capital Acquisition Corp. IV in connection with certain allegedly false and misleading statements made between August 18, 2020 and March 29, 2021.
Torrance, CA based Canoo Inc., a mobility technology company, designs, engineers, develops, and manufactures electric vehicles for commercial and consumer markets in the United States. Canoo Inc. was formed by a business combination between Hennessy Capital Acquisition Corp. IV (a special purpose acquisition (SPAC) company) and Canoo Inc Holdings Limited in December 2020.
On March 29, 2021, on an earnings call with investors to discuss Canoo Inc.'s fourth quarter 2020 financial results, defendants revealed that the Company would no longer focus on its engineering services line. Canoo Inc. further disclosed that its Chief Financial Officer had resigned. The same day, an article was released entitled "Canoo's deal with Hyundai appears dead: The startup's [sic] also changed its tune on selling EV tech to big companies." The article stated that "[w]hen pressed on the startup's previous claims," the current chairman pointed to its prior leadership and said "they were a little more aggressive" and "that talk of potential partnerships was 'presumptuous.'" Lastly, the article noted that "Canoo quietly uploaded a new investor presentation to its investor relations website on Monday that no longer mentions Hyundai."
Shares of Canoo Inc. (NASDAQ: GOEV) declined from $16.30 per share on March 15, 2021, to as low as $8.05 per share on April 5, 2021.
According to the complaint the plaintiff alleges on behalf of purchasers of Canoo Inc. (NASDAQ: GOEV) common shares between August 18, 2020 and March 29, 2021, that the defendants violated Federal Securities Laws.
More specifically, the plaintiff claims that between August 18, 2020 and March 29, 2021, the that prior to and after the combination between Hennessy Capital Acquisition Corp. IV and Canoo Inc Holdings Limited in December 2020, the Company promoted a business model based on a three-phased approach to generating revenue and growth, that an engineering services segment, that the sales of subscriptions to vehicles to consumers, and that the sale of vehicles to other businesses. However, the plaintiff claims that the Defendants misled investors by misrepresenting and/or failing to disclose that the Company's engineering services segment was not a viable business, would not provide meaningful revenue in 2021, and would not reduce operational risk, that the Company would no longer be focused on its subscription-based business model, and that as a result, the Company's public statements were materially false and misleading at all relevant times.