Shares of Canoo (GOEV 17.32%) stock got a kick start this morning when the electric vehicle start-up announced it is replacing current CFO Ken Manget with current board member Greg Ethridge — who becomes the company’s new CFO effective immediately, and who will resign his board seat by the end of the year.
Canoo stock is soaring 18.3% through 12:25 p.m. ET on the news.
Canoo didn’t give a whole lot of detail about its abrupt change of course. Manget had only held the CFO job for about seven months, having taken over from interim CFO Ramesh Murthy back on Jan. 26, and the appointment was supposed to have been permanent.
Canoo stock had lost well over half its market capitalization under Manget’s reign as CFO, however. Whether CEO Tony Aquila decided it was time for another change, though, or whether Manget simply decided the company’s finances were beyond saving, isn’t clear. All Aquila really said on the matter is that Manget did “hard work” and he “wish[ed] him the best in the future.”
As noted above, investors are applauding the CFO switcheroo. Then again, Canoo stock enjoyed a similar bounce — 16% — the day it hired Manget, too, and that still ended badly. Now it’s Ethridge’s turn to try to save this sinking ship.
The facts, however, haven’t changed over the last 24 hours. Canoo remains a company with plenty of potential ($2.8 billion-plus in orders to fill), but plenty of problems, too ($61 million in cash on hand, but a cash burn rate of $80 million a quarter — and already more debt than cash on its books).
On top of all that, Canoo is still a good three or so years away from selling enough cars to earn a profit, according to analysts polled by S&P Global Market Intelligence. And at the rate things are going, Canoo could go through a few more CFOs before it gets there.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.