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Stocks of utility vehicles manufacturer Workhorse Group Inc (NASDAQ:WKHS, WKHS:US) sank by nearly 48 per cent on Tuesday, February 23, after rival Oshkosh Corporation (NYSE:OSK, OSK:US) beat it to a vital US Postal Service contract.
As the update triggered increased volatility, Workforce stocks faced multiple trading halts through the day and, at one point, hit a day low of US$ 12.5. After finally closing the session at US$ 16.4, the stocks dipped roughly 10 per cent in extended trading on Tuesday.
Oshkosh Corporation, meanwhile, saw its shares jump by over six per cent on Tuesday, and went on to record a new 52-week high of US$ 119.7. The stocks also climbed by as much as nearly 17 per cent in post-market hours.
What was the Postal Service Contract All About?
Some analysts projected that the United States Postal Service contract, which witnessed a series of delays over the past several years, reportedly has the potential to reel in billions of dollars in revenue in its decade-long lifespan.
©Kalkine Group 2021
The government agency has awarded Oshkosh Defense the first part of the 10-year contract, which, in the US Postal Services’ words, will see the “most dramatic modernization” of its fleet in 30 years.
Oshkosh will be required to design and manufacture some 50,000 to 165,000 postal delivery vehicles within the span of the contract period. The award comes with an initial investment of US$ 482 million.
EV maker Workhorse, which is currently involved in partnerships with UPS, FedEx Express, etc. is yet to comment on losing out on the contract.
Workhorse’s stock price got almost snipped in half due to Tuesday’s dip. The shares, however, are still up by nearly 347 per cent over the last year.
