Canoo (NASDAQ:GOEV) stock is in the spotlight today following a significant sale from large shareholder DD Global. Canoo manufactures electric vehicles (EVs). The company also recently received a vehicle order from Walmart (NYSE:WMT).
Specifically, Walmart ordered 4,500 of the company’s Lifestyle Delivery Van (LDV) with an option to purchase an additional 10,000 units. Walmart expects to start using the LDV for deliveries next year. Currently, the company is in the process of refining the vehicle configuration. Like other Canoo vehicles, the LDV is built on the company’s proprietary multi-purpose platform (MPP) architecture.
DD appears to have sold some of its GOEV stock before the company announced this Walmart delivery deal. Let’s get into the details.
GOEV Stock: DD Global Sells Shares
This month, DD Global disclosed that it had sold 4.43 million shares, reducing its existing position by 14%. Between July 18 and July 21, the firm filed two Form 4s detailing the sales.
DD sold shares for between $4 per share and $4.08. After the sale, the firm still owns 26.88 million shares of GOEV stock. In addition, DD’s stake in Canoo is now 9.98%, which is under the 10% insider threshold. That means the firm will not reflect further sales via a Form 4. Since November of last year, the firm has sold 52.6 million shares.
DD’s sales of GOEV have previously received legal backlash from Canoo. In May, the company filed a lawsuit against DD, asking for payment of more than $61 million on its “short swing profits.” Canoo argues that DD sold shares in violation of the short swing profit rule. That rule says company insiders must return profits realized from buying or selling shares within six months from a given stock being listed. Canoo first began trading on the Nasdaq in December 2020.
Upon Canoo’s special purpose acquisition company (SPAC) merger, DD beneficial owner Pak Tam Li owned a more than 26% stake in GOEV stock. The large stake caught the attention of the U.S. Committee on Foreign Investment, which said DD must own a 10% or less stake by Feb. 28, 2022. If the ownership was still greater than 10% by then, DD would have to transfer all shares to a voting trust.
In March 2022, DD sold off 10.5 million shares to Bank J. Safra Sarasin. However, Canoo believes DD purchased the same amount of shares at the same time through an equity swap transaction. DD’s sales between July 18 and July 21 have now put it below the 10% threshold.
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On the date of publication, Eddie Pan did not hold (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.