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ElectraMeccanica founder backs Xos merger

EditorIsmeta Mujdragic
Published 03/01/2024, 09:43 AM
Updated 03/01/2024, 09:43 AM
© Reuters.

MESA, Ariz. - ElectraMeccanica Vehicles Corp. (NASDAQ: SOLO), a company specializing in the design and assembly of electric vehicles, has confirmed that its founder, Jerry Kroll, intends to vote in favor of a strategic merger with Xos, Inc. (NASDAQ: XOS), a manufacturer of electric trucks and provider of fleet electrification services. The vote is scheduled for the upcoming special meeting of ElectraMeccanica shareholders on March 20th.

Kroll, who is also a significant shareholder, expressed his belief that the merger with Xos aligns with his vision of advancing zero-emission commercial vehicles and the potential economic benefits for fleet operators. He emphasized his support for the transaction as a step towards creating a combined entity that could significantly impact the electric vehicle market.

Susan E. Docherty, CEO of ElectraMeccanica, acknowledged Kroll's support as a testament to the potential of the proposed combination with Xos. She highlighted Xos's current market presence and positive customer reception, as well as the anticipated growth as the company scales to meet commercial fleet demands.

The proposed merger aims to capitalize on the growing market for electric vehicles, particularly in the commercial sector, and to leverage potential synergies between ElectraMeccanica's urban vehicle designs and Xos's focus on electric trucks and fleet services.

Shareholders of both companies are encouraged to review additional details about the proposed merger, including information on how to vote, available on a dedicated website. ElectraMeccanica has also provided proxy solicitation contact details for shareholders in Canada and the United States requiring assistance with the voting process.

This announcement is based on a press release statement.

InvestingPro Insights

ElectraMeccanica Vehicles Corp. (NASDAQ: SOLO) stands at a pivotal moment as it nears its shareholder vote on the strategic merger with Xos, Inc. (NASDAQ: XOS). Real-time data from InvestingPro shows a market capitalization of $30.22 million, reflecting the size of the company in the electric vehicle industry landscape. The firm's financial health is highlighted by its cash position, with InvestingPro Tips indicating that SOLO holds more cash than debt on its balance sheet, suggesting a level of financial stability as it approaches this critical juncture.

The company's valuation metrics, such as the Price / Book multiple, which stands at 0.35, suggest that the stock is trading at a low valuation when compared to the book value of its assets. This could be an attractive point for investors considering the stock in light of the upcoming merger decision.

However, it's important to note that ElectraMeccanica is also facing challenges. The company is quickly burning through cash, and analysts are anticipating a sales decline in the current year. These concerns are compounded by a significant decline in the stock price over various time frames, including a 64.83% drop over the last year and a 35.07% decrease over the last three months. Such volatility is echoed by an InvestingPro Tip that highlights the stock's price movements as quite volatile.

Investors and shareholders looking to make an informed decision ahead of the vote can find additional insights and metrics on ElectraMeccanica. On InvestingPro, there are 15 additional InvestingPro Tips available, which can provide a deeper understanding of the company's financial health and market position. For those interested in a comprehensive analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at https://www.investing.com/pro/SOLO.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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