GreenPower Motor Company Stock for Electric Buses

December 1. 2021. 7 mins read

Regular readers are all too familiar by now with our disdain for special purpose acquisition companies (SPACs), which exist only to take a private company public. There’s nothing wrong with the concept itself, except that the current lack of scrutiny and transparency often hides all sorts of problems, aside from bloated valuations and wildly unrealistic growth projections. 

It turns out that our cousins to the north have a SPAC-like vehicle of their own called a capital pool company (CPC) that’s been around for more than 20 years. CPCs are particular to the TSX Venture Exchange, a public venture capital marketplace for early-stage companies that don’t want to play the private venture capital game. The exchange is considered the minor leagues to the Toronto Stock Exchange (TSE), and more than 700 companies have reportedly stepped up from TSX Venture to the TSE since 2000. About a third of those were CPCs, which like SPACs are usually shell companies that acquire a real business through a reverse merger. Sometimes it’s a bit of a shell game to figure out exactly how some of these CPCs made it to the big leagues.

About GreenPower Motor Company Stock

Click for company website

That brings us to GreenPower Motor Company stock (GP), a Canadian company that today trades on the Nasdaq and sells electric buses, shuttles, and cargo vehicles. The back story isn’t quite as simple: Once upon a time, there was a CPC named Oakmont Capital Corp. that was listed on the TSX Venture Exchange. In 2013, it became known as Oakmont Minerals Corp., a company engaged in manganese exploration for steel production, but never generated revenue or income from its operations. Meanwhile, also in 2013, an outfit named Blackrock Resources completed a reverse takeover transaction with GP GreenPower Industries Inc. 

By the end of 2014, these two entities (or some subsidiary thereof) amalgamated (in Canadian speak) into the GreenPower Motor Company. The following year, the new company listed on an over-the-counter (OTC) exchange in the United States, which is the equivalent of joining a leper colony from an investment point of view. As in, you never touch an OTC stock (one exception to this rule is foreign listings). A white paper published by the Securities Exchange Commission puts a more official ring to it: “A number of recent academic studies establish that OTC stocks differ from those listed on an exchange because they tend to have poor liquidity and generate severely negative and volatile returns for investors.”

Somewhat miraculously, GreenPower made its way on the Nasdaq last year. It also maintains a listing on the TSX Venture Exchange under the ticker symbol GPV. However, despite joining the big leagues, GreenPower remains a small-time player, with a market cap of about $300 million and 2021 fiscal year revenues of $11.9 million. And investors aren’t exactly enjoying robust returns quite yet with shares down -54% year-to-date. Let’s see if there’s a game plan to avoid a return to the minor leagues.

A Manufacturer of Electric Transit Vehicles?

GreenPower “designs and builds” electric vehicles, mostly focused on mass transit like buses and shuttles, but also a few cargo vehicles. Those are supposed to be air quotes, because while the company identifies itself as an original equipment manufacturer (OEM), it outsources most of its manufacturing to Asia (Malaysia, Taiwan, Hong Kong, and China), with “final assembly” at its facility in Porterville, California. Yes, more air quotes: GreenPower has been the subject of investigations by White Diamond Research, which alleges in a 32-page report that GreenPower is basically selling Chinese-built EVs, among other allegations. Of course, White Diamond isn’t exactly a disinterested third-party trying to keep everyone honest. It’s a research firm that sells information to “hedge funds and high net worth individuals,” usually with the intention of shorting a stock. Draw your own conclusions, but we found red flags that didn’t make it into the report.

For example, GP shares outstanding have increased from 15,486,750 to 22,096,789 since March 2020, an increase of +43%. Most investors don’t pay attention to shares outstanding and they darn well should. As a company issues more shares it causes dilution which erodes the value of shares held by existing investors. The company will likely need to raise again as they have “sufficient resources to sustain operations for the next 12 months.”

Another concern we have is around the numerous conflicts of interest mentioned in their financial filings. Here are just a few:

  • On May 31, 2021, the Company issued 342,857 shares to a company beneficially owned by David Richardson, a director of GreenPower, pursuant to the exercise of 342,857 warrants at a price of CDN $4.55 per warrant, for gross proceeds of CDN $1,559,999.
  • On June 14, 2021, the Company issued 285,714 shares to a company beneficially owned by Fraser Atkinson, the Chairman and CEO of GreenPower, pursuant to the exercise of 285,714 warrants at a price of CDN $4.55 per warrant, for gross proceeds of CDN $1,299,999.

What are these companies beneficially owned by a director and the Chairman and CEO doing to merit the receipt of warrants that dilute existing shareholders? Here’s another interesting tidbit:

A director of the Company and the Company’s CEO and Chairman have each provided personal guarantees of $2,510,000, or $5,020,000 in total to support the Company’s $8 million line of credit. In consideration for these guarantees, in June 2018 the Company issued 628,571 non-transferrable common share purchase warrants exercisable at an exercise price of CDN $4.55 per share that were exercised during the quarter ended June 30, 2021.

Credit: GreenPower Motor Company financial filings

Let’s disregard the fact that this company can’t seem to get a loan on its own merits and just consider what appears to have happened here. The lowest shares traded at in Q2-2021 were $18.25 CAD (based on closing prices). Exercising 628,571 warrants at a strike price of $4.55 would have netted $8,611,422.7 CAD ($6,757,813 USD) if we assume the lowest price during that time frame of $18.25 CAD. Is that appropriate compensation for the value the company received?

Regardless, there are 10 EVs in the current lineup, with the EV Star considered the flagship product in the portfolio with six different models:

GreenPower Electric Motor Company product line.
Credit: GreenPower Electric Motor Company

It is interesting to note that GreenPower doesn’t try to oversell its EV technology. It did recently unleash the BEAST, a 90-passenger school bus (battery electric automotive school transportation) with a 140-mile range. The company also claims to be developing self-driving EVs in partnership with Perrone Robotics, which develops autonomous driving software.

Slowly Scaling Up

The scale of production is pretty modest. Last fiscal year, which ends in March for some reason, GreenPower sold or leased 72 vehicles, including the sale of 30 EV Stars after the leases were canceled. In the second quarter of 2022 (based on the company’s weird fiscal year accounting), GreenPower delivered 44 EVs – 34 sales and 10 leases – with more than 70 finished units in inventory. That generated about $4.4 million in revenue, representing an increase of 57% compared to the second quarter of the previous fiscal year. Total revenues for the first half of the year are up to $7.1 million, which puts the company on pace to have its best year to date:

 GreenPower Electric Motor Company revenues.
Credit: GreenPower Electric Motor Company

Of course, it’s all relative. For comparison, electric bus company Proterra (PTRA), which went public earlier this year, delivered 52 electric transit buses in its most recent quarter and grew revenue 67% to $50 million – more money than GreenPower has made in the last 3 1/2 years.

GreenPower reported that it has about 70 finished EVs in stock, with another 260 in various stages of production.

Should You Buy GP Stock?

Let’s ignore the history of CPC, OTC, and OMG. There are plenty of other reasons to pass on GreenPower Motor Company stock.

For one thing, there are few sectors hotter and more overheated than the electric vehicle market right now. We’ve repeatedly warned against investing in EVs of all shapes and sizes, and recently made the point again in our breakdown of Lucid Motors stock. The preponderance of EV companies with SPAC origins says something about the current state of that industry. And the recent collapse of several SPAC deals or share prices speaks volumes about why these companies are not good for retail investors. And make no mistake: GreenPower is a SPAC by any other name.

Electric school bus.
It should probably be the short bus for GreenPower. Credit: GreenPower Motor Company

Then there’s all the subsidies. It’s safe to say that most of GreenPower’s revenue actually comes through California, where it does most of its business, thanks to the state’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, also known as HVIP. As you might imagine, any reduction to or elimination of this program would put some serious hurt into GreenPower to compete. The company is currently focused on the North American market wherever it can find green credits. The short seller report talks about filing a whistleblower complaint with the SEC regarding GreenPower’s eligibility for such perks.

And that brings us to the competition. If we were to invest in an EV-themed transit stock, it would need to be the clear leader with meaningful revenues, a market cap north of $1 billion, and a diversified customer base. GreenPower only meets the first criterion, and not by much. While there are plenty of GreenPower-like companies out there, most Wall Street analysts would probably agree there are only a handful with any real traction.

For instance:

  • Volvo (VOLCAR-B.ST) actually stopped making diesel buses and recently filled Europe’s largest order of electric buses to date. While not a pure play, Volvo, like every car company, will someday be an electric car company.
  • China is the largest market for electric-powered vehicles, so it’s no surprise it’s also home to some of the biggest all-electric transit bus manufacturers, including BYD (1211.HK) and Yutong Bus (600066.SS). 
  • We already talked briefly about Proterra, but premium subscribers can check out the full article to read about why we’re avoiding this stock.

By the way, you really shouldn’t ignore all that other stuff. Where there’s smoke …


EV stocks are on fire, and they may just help burn down the economy if we’re not all just a bit more circumspect about where we put our money. The transition to electromobility won’t happen overnight, regardless of what you read in the investor decks. And 99% of the time, fortunes aren’t made overnight by betting on high-risk stocks with enough red flags to cause a stampede in Wyoming. As Smokey the Bear might say: Only you can prevent the next Great Recession.


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