How Self-Serving Management Can Still Save Workhorse Stock From $0
Workhorse Group has been a wild ride for anyone foolish enough to buy the stock and I include myself in that category unfortunately. The electric vehicle maker was supposed to win a massive USPS contract that would have transformed the company overnight from speculative gamble to legitimate business with guaranteed revenue. They didnt win. The stock cratered. Now shareholders are left wondering if theres any path forward to recovering their investment or if theyre holding bags destined for zero.
Heres the thing about Workhorse management though – they own a LOT of stock themselves. Like a meaningful percentage of shares outstanding. Whatever else you might say about them and there are things to say, their incentives are aligned with regular shareholders in at least one important way: if the stock goes to zero, they lose money too. Real money. Self-serving management that owns significant equity has powerful reasons to avoid total failure even when altruism might not be motivating them.
The Bull Case For Workhorse Such As It Is
Workhorse still has some things going for it despite the USPS disaster. The technology is real – they make actual electric delivery vans that companies can actually buy and operate. Unlike some EV startups that are basically PowerPoint presentations with ticker symbols, there is a genuine product here that works. The EV commercial vehicle market is still emerging with lots of growth ahead. Unlike some speculative plays on concept alone there is substance underneath the hype.
Losing the USPS contract was brutal – probably the worst possible outcome for a company that had built so much of its valuation around winning that deal. But it wasnt the only customer opportunity in the world. Amazon, FedEx, UPS, and countless other delivery companies are looking to electrify their fleets due to both environmental pressure and operational savings. Workhorse could still capture a piece of that market if they execute well and survive long enough for demand to materialize.
The Bear Case Is Pretty Compelling Though
Competition is brutal and getting worse every quarter. Ford, GM, and basically every major automaker is pushing into electric commercial vehicles with resources that dwarf what Workhorse can muster. Rivian has Amazon backing and billions in funding. Mercedes and Daimler are launching electric vans. Workhorse is a tiny company trying to compete with giants who can lose money for years waiting for the market to develop.
And lets be honest about something uncomfortable – they lost the USPS contract to Oshkosh which is going to make the postal vehicles in partnership with Ford using COMBUSTION ENGINES. Not electric. Gas and diesel trucks in 2021. If you cant beat fossil fuel vehicles in a competition that was explicitly designed to favor EVs, that environmental goals were supposed to influence, thats not a great sign about your competitive position.
I genuinely dont know where Workhorse stock ends up and anyone who tells you they know for certain is lying. Could be a turnaround story people tell for years – the scrappy underdog that lost the big contract but found a way to survive and thrive anyway. Could be a cautionary tale about retail investors piling into meme stocks on Reddit hype and losing everything when reality caught up.
But the management equity ownership at least means someone with power and influence is trying to avoid zero. Executives who own millions of dollars worth of shares have powerful incentives to figure something out. Their net worth depends on it. Thats more than you can say for some companies where management gets paid regardless and shareholders are the only ones who suffer when things go bad.
Is that enough to save the company? Probably not on its own. Incentives matter but so does market reality. If the competitive landscape is just too brutal, if the cost structure cant work, if customers choose competitors, no amount of management motivation will change the outcome. But its something to hang hope on while we wait to see what happens. And in the world of speculative EV stocks, sometimes hope is all youve got.
