Workhorse Group Inc (NASDAQ:WKHS) shares are trading lower Tuesday afternoon. Shares are moving on downward momentum after facing heavy selling pressure Monday, when the company’s 1-for-12 reverse stock split officially took effect. Here’s what investors need to know.
What To Know: The corporate action, which consolidated outstanding shares from approximately 26 million to roughly 2.17 million, was implemented to satisfy Nasdaq’s minimum bid price requirements amid the company’s merger with Motiv Power Systems.
This volatility follows the company’s third-quarter earnings report last month, where Workhorse delivered mixed results. While the company narrowed its loss per share to 50 cents, beating estimates, revenue fell short at $2.39 million, missing the $3 million analyst consensus target.
Why The Sell-Off? Despite the mechanical adjustment to the share price, markets often interpret reverse splits as a distress signal. Healthy companies typically boost share prices through organic growth. A reverse split is an artificial remedy used to avoid delisting.
Investors frequently sell on this news due to concerns that the split is a precursor to future dilution, fearing the company will use the higher share price to issue new equity for emergency capital. For Workhorse, the move underscores the urgency of maintaining compliance to finalize the Motiv transaction and secure necessary liquidity.
Benzinga Edge Rankings: Reflecting the stock’s current weakness, Benzinga Edge rankings assign Workhorse a critical Momentum score of just 3.34, accompanied by negative price trends across short, medium, and long-term horizons.
WKHS Price Action: Workhorse shares were down 12.52% at $6.64 at the time of publication on Tuesday. The stock is trading near its 52-week low of $6.36, according to Benzinga Pro data.
From a technical perspective, the stock is currently trading 41.8% below its 50-day moving average of $11.34 and 64.3% below its 200-day moving average of $18.51.
Such a substantial gap from both moving averages indicates a bearish trend, suggesting that the stock has not only lost momentum but also faces significant resistance in regaining lost ground.
Read Also: US Consumers Are Flocking To Dollar Stores: Is This An Economic Warning?
Image: Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Market News and Data brought to you by Benzinga APIs
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.