Xos, Incorporated (NASDAQ: XOS) witnessed a partial resurgence in its stock value during the extended trading session, experiencing a notable increase of 4.92% to reach $8.96. This uptick contributed to a partial recovery from the previous regular-session loss of 12.68%, culminating at $8.54. The absence of significant news suggested that prevailing market dynamics were instrumental in sustaining the stock’s position.
Xos, Inc. (XOS) recently completed its acquisition of a renowned designer and assembler of electric vehicles, ElectraMeccanica Vehicles Corp. (NASDAQ: SOLO). The terms of this acquisition were initially disclosed on January 11, 2024. Notably, this all-stock transaction is anticipated to augment Xos’ balance sheet by approximately $48 million, thereby furnishing vital growth capital for the company.
Leveraging the growth capital obtained through this transaction, coupled with prudent measures to curtail cash burn, sets a significant trajectory toward profitability as XOS expands its delivery operations over the ensuing quarters. Xos has attained positive gross margins and is now poised to achieve positive free cash flow.
Xos set a record in the fourth quarter of 2023 when it delivered a staggering 110 units to its fleet clients. Industry heavyweights including UPS, FedEx Ground, Loomis, UniFirst, and Penske were among its prestigious clients in 2023, demonstrating the strong demand for its electric commercial cars. Canada Post was also among them.
With ElectraMeccanica’s capital on hand, Xos is in a good position to continue growing and meet the growing demand for commercial cars with zero emissions. Xos’ dedication to operational excellence, customer-focused vehicle solutions, and prudent capital deployment is further strengthened by this strategic purchase.
ElectraMeccanica shareholders received consideration equivalent to 0.0143739 shares of Xos common stock for each common share of ElectraMeccanica held before the consummation of the transaction. As a result, when the transaction was completed, the previous owners of ElectraMeccanica now own around 21.0% of Xos.
ElectraMeccanica’s common shares were delisted from Nasdaq last month after the transaction was completed, and the business also gave up its reporting issuer status in British Columbia, Canada.
