Investors in the electric vehicle sector are (mostly) seeing a ton of green today. However, investors in Workhorse (NASDAQ:WKHS) certainly aren’t having the same experience. Currently, WKHS stock is down approximately 10% on heavy volume.
Investors may note that Workhorse is a company that’s been trending in the wrong direction for some time. Despite peaking in early February around $43 per share, and then again in June around $17 per share, WKHS stock has since slipped to the $6.50 level today.
This dramatic decline has been a result of a number of key factors. Chief among these is a high-profile short report from Fuzzy Panda circulated in early September. This short report led to an initial U.S. Securities and Exchange investigation into the company.
However, today, there’s more news on this front. Let’s dive into what’s taking Workhorse lower.
WKHS Stock Plunging on Additional Probe
What’s worse than one SEC investigation? You guessed it: Workhorse is embroiled in yet another probe, this time from the U.S. Department of Justice.
Reportedly, concerns around allegations of fraud at Workhorse have invited more regulators to take a look at this upstart EV company. Workhorse has close ties with another company that’s been under regulatory scrutiny for much of this year — Lordstown Motors (NASDAQ:RIDE). Whether the ties between the two companies are being explicitly investigated remains to be seen.
However, investors don’t seem to like the direction these probes are headed. Indeed, any time the DOJ gets involved, things tend to get serious really fast.
The focus of this inquiry is not yet known. However, this probe is certainly the last thing investors in WKHS stock were looking for. Accordingly, it appears investors are viewing this stock as simply too high risk to touch. With many other EV options available right now, it appears capital is flowing out of this stock and into other attractive names right now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.