CEO's Private Jet Expense Raises Eyebrows as Canoo Stock Price Plummets

Despite cutting the expenses in half, EV maker Canoo struggles with cash burning, and still, the CEO is using a $1.7 million private jet that's double what the company is producing in profits (as per their 2023 earnings report).

Image Credits: Canoo

Just like many others and as reflected in its recent earnings report the stock price decline is currently alarming bankruptcy bells with a 26% downfall in premarket trading leaving the company at a $170 million market capitalization which was a whopping $4 billion in 2021.

Even after making a profit and cutting expenses with a great projection by Wall Street about up to $109 million in sales for 2024, Canoo reported lower-than-expected revenue of $367,000 for the fourth quarter, falling short of Wall Street's projections.

The company is losing money continuously as Canoo's adjusted EBITDA loss was $54.6 million and the case burn rate is too high to handle as the EV maker expects significant cash outflow in 2024, ranging from $45 million to $75 million per quarter.

While all this going on with the company, Canoo CEO is using a private jet with a $1.7 million reimbursement from Canoo. This is something that is forcing investors to sell the stock dropping the stock price by 26%.

However, the CEO Tony Aquila is still confident as he said in a press release:

“We started our first commercial fleet customer deliveries from our Oklahoma City manufacturing facility while we continue to prepare the site for our 20,000 unit run-rate production target,”

He's more confident about shareholder value and added further:

“Our strategy to purchase manufacturing assets at deep discounts creates immediate shareholder value.”

However, Canoo is trying to scale up to avoid bankruptcy as the same thing happened to Arrival (another EV startup). But the CEO’s lavish spending on a private jet’s rent is a big concern about how’s the company going to perform well.