Workhorse Group Plummets 23%—What’s Driving the Sudden Slide?

• WKHS plunges 22.95% to $2.165, hitting an intraday low of $2.14
• Merger rumors with a private EV manufacturer spark volatility
• Sector leader Tesla (TSLA) drops 1.94%, contrasting WKHS’s freefall

Workhorse Group’s stock cratered nearly a quarter of its value in a single session amid heightened speculation about a strategic merger. The company’s announcement of merger talks with a U.S. electric commercial vehicle manufacturer set off a rollercoaster ride, with shares diving from an open of $2.50 to near $2.14—marking the lowest price since late 2023. The broader auto sector, however, remained muted, underscoring WKHS’s standalone volatility.

Merger Uncertainty Sparks a Sell-Off
Workhorse Group’s stock collapse traces directly to its announcement of merger negotiations with a privately held EV manufacturer. While the move aims to bolster its electric delivery vehicle portfolio, investors reacted skeptically to the lack of specifics—such as valuation terms or timeline. The company’s history of ambitious targets without material execution further fueled doubts, pushing shares to their lowest point since early 2024. The merger’s potential risks—regulatory hurdles, integration challenges, and market saturation in the EV space—outweighed its theoretical benefits in the short term.

EV Sector Mixed as WKHS Cratered
Technical Bearishness Meets High-Impact Options
• MACD: 0.57 (bullish), Signal Line: 0.32, Histogram: 0.25 (bullish momentum)
• RSI: 67.6 (neutral)
• Bollinger Bands: Current price ($2.165) hugs the lower band (0.2996), signaling oversold conditions
• 30D MA: $1.41 (below current price)
• 200D MA: $1.00 (far below)

Technicals suggest a potential bounce toward $2.50 (near-term resistance) or a deeper decline toward $1.40 (long-term support). Aggressive traders might exploit the merger uncertainty with bearish options:

1. WKHS20251017P2 (Put, Strike $2.00, Exp 10/17/2025)
- Delta: -0.075 (low sensitivity)
- Implied Volatility Ratio: 13.01%
- Leverage Ratio: 8.68%
- Gamma: 0.925 (high price responsiveness)
- Why: This deep-in-the-money put offers asymmetric risk-reward at $2.00 strike, with gamma amplifying gains if volatility spikes further.
- Payoff Scenario: If WKHS drops to $1.80 (5% decline), payoff = $0.20 (10% return).

2. WKHS20260116P2.5 (Put, Strike $2.50, Exp 1/16/2026)
- Delta: -0.189 (moderate downside exposure)
- Implied Volatility Ratio: 264.46% (extremely high)
- Leverage Ratio: 1.32%
- Theta: -0.0025 (slow time decay)
- Why: The stratospheric IV reflects extreme uncertainty, creating a high-risk/high-reward play if merger news reignites volatility.
- Payoff Scenario: A 10% drop to $1.95 yields a $0.55 payoff (30% return).

Trading Hook: If merger talks stall, short WKHS below $2.00 with WKHS20251017P2. For longer-dated volatility bets, WKHS20260116P2.5 could pay off if uncertainty lingers into 2026.

Backtest Workhorse Group Stock Performance
The backtest of WKHS's performance after a -23% intraday plunge shows mixed results. While the 3-Day win rate is 44.12%, the 10-Day win rate is 43.09% and the 30-Day win rate is 43.24%, indicating a higher probability of positive returns in the short term. However, the maximum return during the backtest period was only 0.08%, suggesting that even though there was some recovery, it was relatively modest.

Buckle Up for Workhorse’s Volatile Ride—What’s Next for WKHS?
Workhorse’s stock remains hostage to merger speculation and technical weakness. Bulls may argue that $2.00-$1.40 support offers a buying opportunity, but skepticism over execution risks and the EV sector’s crowded landscape loom large. Investors should monitor the merger’s progress closely—positive updates could trigger a rebound toward $2.50 resistance, while further delays could push shares toward $1.00. Meanwhile, sector leader Tesla (TSLA)’s 1.94% drop highlights broader EV market caution. Action Item: Watch for $2.00 breakdown or a bounce above $2.50 resistance—either could signal a new trend. For options traders, high IV contracts like WKHS20260116P2.5 offer a leveraged bet on continued volatility.