GREATEC (0208): GREATECH TECHNOLOGY BERHAD down 10.34% following report on snafu in Lordstown Motors Corp commercial production
KUALA LUMPUR (June 9): Greatech Technology Bhd's share price declined 10% as at the noon market break, following a report that its client Lordstown Motors Corp had disclosed that it might not be able to commence full commercial production.
At 12.30pm, the counter was down 60 sen or 10.34% to RM5.20, giving a market capitalisation of RM6.51 billion. A total of 16.08 million Greatech shares were traded, almost six times its 200-day average trading volume of 2.79 million shares.
Today's dip in its share price marked the first major correction since its shares went on an uptrend starting from May 19. Year-to-date, the counter has risen 14%.
The Wall Street Journal on June 8 reported that the US-based electric-truck start-up disclosed that it did not have sufficient cash to start full commercial production and had doubts about whether it could continue as a going concern through the end of the year.
The publication said Lordstown Motors had amended its annual report to include the going concern notice, which came as new challenges emerged for the two-year-old company that is trying to convert a former General Motors Co plant in Ohio to produce electric pickup trucks.
Quoting a spokesman for the company, the report said the company is not moving back its September target for the start of production and that it hopes to raise more capital, potentially through asset-backed financing or a government loan programme.
In a note dated April 26, PublicInvest Research said Greatech's strong performance in its first financial quarter was attributable to higher contributions from its production line systems segment, amid stronger contributions from Lordstown Motors's orders.
The research house maintained an "outperform" call on Greatech, with a target price of RM6.80.