Workhorse Stock Is Plunging After a Reverse Split. Should You Buy the Dip?

Core Viewpoint - Workhorse (WKHS) stock has declined by 7% following a 1-for-12 reverse stock split, raising concerns among investors about the company's financial health and future compliance with Nasdaq listing requirements [1][3][4]. Company Summary - The reverse stock split reduced the total number of WKHS shares outstanding from approximately 26 million to about 2.17 million, with fractional shares rounded up [1]. - Post-split, Workhorse shares are trading at just over $7, categorizing them as a penny stock [2]. - The reverse split was a strategic move to meet Nasdaq's minimum listing requirements, indicating potential delisting risks if compliance is not achieved [3][4]. Financial Health and Performance - The reverse split raises significant questions regarding Workhorse's financial health and operational performance, making the stock unattractive for long-term holding [5]. - Continued selloff after the split suggests a lack of confidence from both institutional and retail investors regarding the effectiveness of the corporate action in addressing core business challenges [5]. Market Sentiment and Risks - Workhorse remains vulnerable to high volatility and speculative trading behaviors, which can adversely affect late investors [6]. - The electric vehicle sector is experiencing a shift in investor sentiment, favoring traditional automakers over smaller, pure-play EV companies, further increasing the risk associated with owning Workhorse shares [6]. - WKHS stock coverage is limited to only three Wall Street analysts, indicating a lack of deep institutional research and insights [7].