Struggling electric vehicle (EV) maker Canoo (NASDAQ:GOEV) is trending on social media and financial news websites today because the firm has carried out a 1-for-23 reverse split of GOEV stock.

More About the Reverse Split

Canoo’s reverse stock split has caused its stock price to soar to $2.25 this morning from 9.9 cents as of the market close yesterday.

However, the value of each shareholder’s holdings has still managed to drop by about 2% today. That’s because they all now hold one share for every 23 shares that they owned previously. Even with that combination, GOEV stock is trending downwards this morning.

Canoo implemented the reverse stock split because, under Nasdaq rules, the share prices of firms trading on the exchange cannot stay below $1 for long periods of time.

Additionally, GOEV stock may be more appealing to some investors at its current price than it was at its very low previous level.

Canoo’s board approved the split on Feb. 29.

Canoo’s EVs and Growth Potential

In the first nine months of 2023, GOEV lost $273.6 million. Moreover, its sales in the year that ended on Sept. 30 came in at only $500,000.

However, the automaker began deliveries of its electric vans for companies in February, while the U.S. Post Office has agreed to buy six of its EVs. Also noteworthy is that the U.S. Army and NASA have both evaluated prototypes of Canoo’s EVs.

Investors should evaluate the extent to which GOEV is able to increase the orders of its EVs by government agencies and companies. They should also monitor the amount by which it is able to reduce its losses.

The Price Action of GOEV Stock

The company’s shares have slid 40% in the last month, 62% in the last three months, and 84% in the last 12 months.

On the date of publication, Larry Ramer 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.