Workhorse Group Inc. rose after a U.S. lawmaker raised questions about a $54.2 million late-day block trade in competitor Oshkosh Corp. on the eve of a blockbuster U.S. Postal Service contract award and Democrats proposed $6 billion to electrify the agency’s vehicle fleet.
Legislation being introduced Monday by Representative Jared Huffman, a California Democrat, would require at least 75% of vehicles being procured by the post office to replace its existing gas-guzzling fleet be electric or zero emissions, according to a bill summary. The funding would need additional approval by congressional appropriators.
Separately, Ohio Representative Tim Ryan spotlighted the 524,400-share Oshkosh deal, which came in after-hours trading on Feb. 22 ahead of the company’s surprise win of the postal truck contract. The size of that trade was almost as much as average daily volume in the stock in the prior year, according to data compiled by Bloomberg.
Ryan’s demands for an investigation added fuel to Workhorse’s long-shot bid to overturn its loss to Oshkosh, which surged as much as 16% on Feb. 23, the day the Postal Service announced the maker of military trucks had won a contract to construct a fleet that will consist mostly of combustion engine vehicles.
The holdings would be worth $59.8 million at this Oshkosh price of $114.08 at 11:35 a.m., or more than $5 million above the purchase price. The parties involved in the trade couldn’t be determined.
“It definitely stinks and needs to be looked into at the highest levels,” Ryan, an Ohio Democrat who is fighting the award to Oshkosh, said in an interview. “If that is not suspicious, I don’t know what is. Somebody clearly knew something.”
Ryan said he will ask the Securities and Exchange Commission to investigate. Representatives of the agency didn’t respond to an emailed request for comment.
Workhorse shares rose as much as 29.3% Monday and were briefly paused and were trading up 10.2% to $15.12, at 11:35 in New York.
The Postal Service awarded Oshkosh, a Wisconsin-based maker of military trucks, a 10-year contract for as many as 165,000 vehicles worth as much as $6 billion.
Ryan is backing the losing bid of Workhorse which has a 10% stake in Lordstown Motors Corp., which makes electric vehicles at a facility in Ryan’s congressional district.
An Oshkosh representative didn’t respond to a voicemail and email seeking comment. Its shares were down 0.28% to $113.21 Monday at 10:26 a.m. in New York.
The move to award Oshkosh the contract stunned Wall Street analysts who had predicted Workhorse’s proposal to make electric trucks would win at least some of the order. Workhorse is considering challenging the award.
Trades outside of normal market hours can have a significant impact on share prices because market activity is thinner.
Ryan, who said he is drafting a letter to the SEC, has joined with Ohio Democrats Marcy Kaptur and Senator Sherrod Brown in calling for the Biden administration to halt and review the Postal Service award to Oshkosh.
