There is some big big news in the ev sector. Lord sound motors is going public, which is huge news for workhorse. Here's what you need to know what's going on everyone, i hope you're having a great day. My name is matt and in this video i will be breaking down the recent lordstown motors announcement and its impact on workhorse if you're new to the channel and you enjoy this type of content join the party by hitting the subscribe button.

Don't forget to turn on your notifications, so you don't miss any of the new videos. Alrighty then, let's dive into it, electric pickup truck maker, lord sound motors is going public. Lord sound motors will become a public company as it is agreed to be acquired by a special purpose acquisition company diamond peak. The deal implies a 1.6 billion dollar equity value for lordstown.

The market reacted extremely well to this. News and diamond peak stock went soaring over 17 in pre-market trading. Diamond peak is currently trading under the ticker dphc, but the new combined company will trade under ride, so you might be wondering what does this have to do with workhorse? The short answer is that workhorse owns 10 of lordstown motors, but there are some other details you should be aware of. Lordstown motors is in the game of building electric pickup trucks.

Steve burns used to be workhorses ceo, but is now the ceo of lordstown? They licensed the pickup truck technology to lordstown motors and have turned the pre-orders for the trek over to lordstown in exchange. It owns a 10 stake in lower sound and gets a 1 commission on the first 200 000 trucks sold. This means workhorse is now the proud 10 over of the 1.6 billion dollar lordstown motors. Let's take a quick look at some of the other important details.

Lordstown has entered into a definitive merger agreement with diamond peak. That means it's happening. There's no pulling out now once the deal is done in the fourth quarter of 2020. The combined company will trade under ride.

Lordstown endurance will be the first full-size electric pickup truck designed to serve the u.s commercial fleet market with initial production expected in the second half of 2021. A portion of the proceeds from this transaction will be used to fund the production of the endurance. Many big names have invested into this becoming a reality that includes general motors, fidelity management and blackrock, to name a few. Here's a quote from the ceo steve burns.

We are thrilled with the opportunity to build lordstown motors into a top-tier electric truck company that is highly differentiated from the competition. I think it's downright impressive that they're looking to get 75 miles per gallon with these trucks and i'm not the only one since its unveiling. Just over a month ago, the endurance has been met with enthusiastic support and to date they have secured 1.4 billion dollars in pre-orders lordstown unveiled. The prototype of its flagship endurance, pickup truck on june 25th, 2020 and to date, has received more than 27 000 pre-orders.

For the vehicle, so you can't trade lordstown yet, but you can trade workhorse and boy did it run today? What a way to start august from the previous close to today's close the stock ran an incredible 24 to get a better idea for the support and resistance in this area. Let's switch over to the daily chart from june until july, workhorse ran an unbelievable 835 percent. Since then, it dropped a little bit and then became range bound, but on this news it looks like it's breaking out and it might even try to test the all-time high of 22.90 if the stock does manage to get there from today's close. That would be a gain of just under 20 if the bears can't protect this line.

It's just open skies above if more people start to pile in and the shorts get squeezed. We could see another crazy run like this. However, if you're not already long, i would recommend buying as close to support as possible. So you minimize your risk.

The first support would be the previous resistance of seventeen dollars and twenty cents. If the bull camp can't hold this line, you could then watch for the low in july, which would be at thirteen dollars and six cents. I honestly don't think it will happen anytime soon, but a final reach target could be ten dollars and thirty cents. This would mark a gap fill and it was also previous resistance years ago.

I don't have a crystal ball, so i can't definitively tell you the future, but it's my personal opinion that workhorse will test this previous all-time high from a charting perspective. It's difficult to pick out targets above this because the chart hasn't developed in this region, but i can show you what a few analysts have said. The average analyst rating on workhorse is bullish, with one being very bearish and five being very bullish. The average rating is 4.25 now granted.

There were only four analysts pulled, but two were very bullish. One was bullish and one was neutral. I think this was a little outdated, but third price target was 21.50 cents. I stumbled across this article, which is definitely worth a read.

This analyst has a price target of 26 dollars, there's obviously more detail in this article, but the main argument in favor of workhorse is that it might get the u.s postal service contract. The main argument against workhorse is that it's a new company, which means it has a lot of unknowns, especially when it comes to its battery. Basically, battery powered electric trucks need a lot of electricity. All in all, workhorse is a speculative bet, classic high risk and high reward.

I personally believe if workhorse wins the usps contract, it will run like a madman, but if it doesn't, you can expect a considerable decline. Here's to hoping that we can find out more about. What's going on with the contract on their next earnings call, which is on august 10th until then be safe out there and trade with a plan? If you enjoyed this quick update, let me know by hitting the like button, if you enjoy this type of content subscribe to the channel and don't forget to turn on your notifications, thanks for watching and until next time best of luck in the markets.