Electric van maker Workhorse Group Inc. (NASDAQ: WKHS) stock plunged more than 50% late last month when a potential $6 billion contract to supply new delivery vans for the U.S. Postal Service was awarded to a competing bidder, defense contractor Oshkosh Corp. (NYSE: OSK).
Workhorse stock traded up more than 15% Monday morning following comments by U.S. Representative Tim Ryan (D-Ohio) who wants the U.S. Securities and Exchange Commission (SEC) to investigate an after-hours trade of some 524,400 shares of Oshkosh stock on January 22, just a day before the company won the contract award.
Bloomberg cited comments from an interview with Ryan: “It definitely stinks and needs to be looked into at the highest levels. If that is not suspicious, I don’t know what is. Somebody clearly knew something.”
Workhorse is located in Loveland, Ohio, about 15 miles northeast of Cincinnati, and is included in Ohio’s 2nd Congressional District represented by Republican Brad Wenstrup, who was first elected to Congress in 2013. Ryan represents Ohio’s 13th legislative district, which includes Akron and areas east of the city to the Pennsylvania state line, including Lordstown.
In 2019, former President Trump named Workhorse as the company that was purchasing GM’s Lordstown, Ohio, assembly plant. The plant eventually was acquired by another electric vehicle startup, Lordstown Motors, that plans to build its all-electric pickup trucks in the Lordstown plant. Workhorse has a 10% stake in Lordstown Motors.
According to Bloomberg, Congressperson Ryan is drafting a letter to the SEC, along with Marcy Kaptur (D), a member of Congress since 1983, who represents the Lake Erie coastline from Toledo to Cleveland, and Senator Sherrod Brown (D), seeking a review of the contract process before making the award to Oshkosh. Oshkosh did not reply to a request for comment from Bloomberg.
Investors who once sent the stock up nearly 30% on Monday morning, have cooled their enthusiasm somewhat, with shares of Workhorse last seen trading up about 8.2% at $14.85, after soaring to $17.75 earlier.
Workhorse’s 52-week range is $1.32 to $42.96, and the consensus price target on the stock is $19.40. The stock trades an average of around 20 million shares a day. Thus far Monday morning, nearly 28 million shares had changed hands.