Arrival was once one of the most promising mid-cap tech growth stocks that looked like it had the potential to become the next Tesla. 3 years on and it’s now a penny stock with a market cap of 29.71M.
Up until recently, I had thought that that extremely low market cap for an EV manufacturer was an obvious buying opportunity; however, I am reducing my exposure to this company because I am starting to lose faith. Admittedly, my call for strong demand on Arrival stock recently was a bad one. Arrival continued to decline.
One of the reasons I’m losing faith is because it doesn’t seemingly have good leadership yet, or at least there are no signs of good leadership. The recent deal to reSPAC with Westwood Capital has been heavily scrutinized by analysts and there’s virtually no good news to go on since that would give investors any confidence. Part of me still loves Arrival — the innovation Arrival has planned is an innovation I support — and they have proven to still be able to draw in hedge funds for investment — they also received 50 million from Antara Capital recently — but as this bear market continues, their funds are running out which leaves them no choice but to not be productive. And it’s a bad combination: no production of cars and no revenue is what institutional investors stay well away from. Sentiment around Arrival is at an all-time low and sentiment around the economy in general is bearish. Thus, I’m fearful that Arrival may go bankrupt.
I am keeping some money on Arrival so if it does succeed I can say I was part of that successful effort, but I’m not deploying meaningful amounts of my overall portfolio on Arrival anymore, at least not until this bear market starts to wane.
Arrival has a market cap of 29.71M and an RSI of 29.45. Insider ownership is up 44.99%; however, its short float is dangerously high at 22.99%. Given all that short interest, now is not the time to be in this stock yet. It could go lower still.