Why GreenPower Motor Shares Are Falling

Zinger Key Points
  • GreenPower Motor shares are trading lower by 27% during Tuesday’s session.
  • The company priced its underwritten public offering.

GreenPower Motor Company Inc GP shares are trading lower by 22.5% to $1.41 during Tuesday's session after the company priced its underwritten public offering, consisting of 1.5 million common shares and warrants to purchase an equal number of shares, at a combined price of $1.55 per share.

This amounts to approximately $2.3 million in gross proceeds before deductions. The warrants, with an exercise price of approximately $1.82 per share, will expire three years from the date of issuance and are immediately exercisable. 

Additionally, the underwriter has a 45-day option to purchase up to 5% more of the offered shares and/or warrants. Maxim Group LLC is the sole book-running manager for the offering. 

GreenPower plans to utilize the net proceeds for the production of all-electric vehicles, including school buses and commercial vehicles, along with product development and general corporate purposes. The offering is expected to close around May 9, subject to customary closing conditions and regulatory approvals.

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Should I Sell My GP Stock?

Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.

Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.

Shares of GreenPower Motor have lost 54.04% year to date. This compares to the average annual return of -51.99%, meaning the stock has underperformed its historical averages. Investors can compare a stock's movement to its historical performance to gauge whether this is a normal movement or a potential trading opportunity.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. GreenPower Motor Co stock currently has an RSI of 43.34, indicating neutral conditions.

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