By CCN.com: It’s not rare for Donald Trump’s social media antics to trigger a stock market sell-off, but one unexpected tweet from the president sent a little-known stock surging more than 200% this week.
Writing in a Wednesday morning tweet, President Trump revealed that electric truck maker Workhorse planned to buy GM’s “beautiful Lordstown Plant” in Ohio following its recent closure.
Right after the tweet, the company’s stock price took off. Workhorse shed its penny stock status, closing up 214% at $2.65. The stock dipped 15% on Thursday amid a broad, arguably Trump-induced market sell-off but continues to trade at $2.25.
Trump has pushed for companies, especially automakers, to keep their plants in the U.S. GM made its way onto his hit-list when it cut vehicle production at the now-closed Lordstown plant. As recently as 2016, GM employed 4,500 people at the plant and in March cut the final 1,500 jobs, according to Reuters.
GM’s said the sale of that plant to Workhorse has the potential to result in significant production and electric vehicle assembly jobs.
In a statement, GM CEO Mary Barra said:
“We remain committed to growing manufacturing jobs in the U.S., including in Ohio, and we see this development as a potential win-win for everyone. “Workhorse has innovative technologies that could help preserve Lordstown’s more than 50-year tradition of vehicle assembly work.”
The deal faces headwinds. It must be approved by the United Auto Workers (UAW), which currently opposes it. Since last November, GM says it’s been in discussions with the labor union regarding the impact of changing market conditions on the facility.
Workhorse, despite its cutting-edge efforts in the EV field, has been in a financial bind for years amid declining revenue.
Sales for the first quarter of 2019 were $364,000, down from $560,000 in the first quarter of 2018. The company said the decrease in sales was primarily due to a decrease in the volume of trucks delivered.
Although its cash position has improved since 2018, it’s still struggling. At the end of March, Workhorse had just $2.8 million in cash on hand.
CNBC reported that the tweet caused so much interest in Workhorse that its website crashed and was inaccessible about three hours after the Trump mention.
While investors shrugged off concerns that the deal may not go through, Trump’s critics did what they do best – complained of nefarious activities lurking behind the scenes.
Last modified: July 2, 2020 8:10 PM UTC