Let's talk about Atlis Motors...

At first glance, Atlis Motors' listing on NASDAQ (ticker AMV) looks like a massive win for equity crowdfunding, but a deeper dive into the scenario shows that the picture isn't as rosy as expected. Even a simple look at the first week's price action should give potential investors pause.

First, the price movement occurred on very low volume. The trades that happened at $200+ per share were on trades of a couple hundred shares, not thousands or millions, and happened after hours, when volume was even thinner than during the day. By Friday close, Atlis was trading below the "IPO" price of $27.50.

Second, Reg CF investors were notified that their shares were restricted, that is, they can not be sold for a period of time. The Reg A shares were part of the "mini IPO" or direct listing process, and therefore could be sold immediately. Every article celebrating the massive returns of early equity crowdfunding investors seems to have popped the champagne too soon, since none of the early investors can actually realize those juicy gains celebrated.

Third, investors should be mindful of the "bubbly" / meme-ness of the moment for EVs. While Atlis may not be accused of misleading investors like Nikola or other recently public EV companies, the reality of the situation is that manufacturing an electric vehicle from scratch is going to require massive amounts of capital investment, and the first week of trading of a stock is irrelevant except for the people who were able to cash out their investments. Atlis had $638k in cash in the bank at the end of the last quarter ended June 30 per its 10-Q filed on 9/27.

Fourth, Atlis is another equity crowdfunded company that questions the longevity of these companies in the public space. Three other companies that have gone public, Knightscope, T Stamp, and Digital Brands Group, had similar initial success with large spikes, but now trade as penny stocks at risk of being delisted from NASDAQ because of their price levels.

Nanalyze has a pretty decent breakdown of the Atlis fundraising history that is worth the read.