Workhorse Group Inc (WKHS) – Short – Critical Failures in USPS NGDV Bid Revealed – Fuzzy Panda Research
Workhorse Group (WKHS) stock analysis reveals critical manufacturing failures, nonexistent production capacity, and massive promotional campaign. USPS contract at risk with -631% gross margins, prototype defects, and mass insider selling.
Fuzzy Panda Research reveals catastrophic issues at Workhorse Group (WKHS), predicting imminent stock collapse as the USPS prepares to announce its $6.3B Next Generation Delivery Vehicle contract winner.
Stock ino:
- Ticker: WKHS (Workhorse Group Inc.)
- Position: Fuzzy Panda Research is short Workhorse Group and stands to benefit from price declines
Why it matters:
- Workhorse's prototype vehicles have experienced critical failures, including a parking brake failure that injured a USPS driver in 2018, halting testing and causing prime contractor VT Hackney to withdraw
- Manufacturing capabilities are virtually nonexistent - investigators found only "show trucks" being manually assembled with no automated production line
- Component costs alone create an estimated -631% gross margin, making production economically unsustainable
- Major customers (UPS, FedEx, DHL) have quietly ceased ordering or removed associations with Workhorse
- Extensive insider selling totaling over $31 million signals management's lack of confidence
- Company possesses minimal intellectual property - just eight patents, mostly acquired at no cost from Navistar
- Massive coordinated stock promotion campaign identified with 420+ YouTube videos from 80+ promoters
State of play:
- Workhorse's Union City manufacturing facility lacks basic security measures, with investigators easily accessing proprietary information
- CEO Duane Hughes lacks relevant automotive experience; new CFO Steve Schrader has controversial history linked to union-busting
- Workhorse's drone technology has failed to achieve FAA certification due to construction and navigation problems
- VT Hackney valued the entire USPS project at "under $19 million" and deemed it "potentially immaterial" while Workhorse's market cap soared to billions
- UPS has shifted 10,000 vehicle orders to competitor Arrival while Workhorse's claimed 950-truck UPS order generated only $756,000 by mid-2020
FAQs:
What is the Fuzzy Panda Research report on Workhorse Group about?
The report exposes severe operational, manufacturing, and technological deficiencies at Workhorse Group that undermine its ability to fulfill the $6.3 billion USPS Next Generation Delivery Vehicle contract it's pursuing. The research reveals prototype failures, nonexistent production capacity, and extensive stock promotion activities.
Why does Fuzzy Panda Research believe Workhorse will lose the USPS contract?
Fuzzy Panda cites multiple critical failures in Workhorse's prototypes, including a serious parking brake failure that injured a USPS driver. Additionally, Workhorse's prime contractor VT Hackney withdrew from the project in 2019, and the company lacks manufacturing capacity to fulfill such a large contract.
What manufacturing issues does Workhorse face according to the report?
The report reveals that Workhorse's facilities produce only manually assembled "show units" with no automated, scalable manufacturing process. Site visits to Union City, Indiana and Loveland, Ohio facilities showed minimal capital investment in production equipment and an absence of real production lines.
How profitable would Workhorse's vehicles be if they won the USPS contract?
According to Fuzzy Panda's analysis, Workhorse's economics are completely unsustainable. The parts cost alone far exceeds the potential sale price, leading to estimated gross margins of approximately -631%, making profitable production impossible.
What evidence suggests Workhorse's stock has been artificially promoted?
The research documents an extensive network of over 420 promotional videos from 80+ YouTube channels, many with coordinated messaging about the USPS contract. Workhorse has historical ties to stock promotion firms previously charged by the SEC, and significant insider selling ($31+ million) suggests management lacks confidence in the company's future.
What happened with Workhorse's relationships with major delivery companies?
Major customers including UPS, FedEx, and DHL have either ceased ordering or quietly removed associations with Workhorse. UPS has shifted 10,000 vehicle orders to competitor Arrival, while Workhorse's claimed 950-truck UPS order generated only $756,000 by mid-2020, with no drone program updates since December 2018.
What intellectual property does Workhorse own?
Fuzzy Panda found that Workhorse possesses only eight patents, most acquired at no cost from Navistar. This represents a significant innovation deficit compared to competitors like Motiv Power Systems, which has a much broader EV patent portfolio.
Disclaimer
This summary is based on a report by Fuzzy Panda Research. For the full, detailed analysis, please refer to the original source material: https://fuzzypandaresearch.com/workhorse-group-critical-failures-revealed/
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