stock of electric vehicle startup lordstown motors hit a new 52week intraday low thursday it was another rough day for investors in electricvehicle companies that raised money and went public by merging with specialpurpose acquisition companies finding a bottom for the stock might depend on cash balances lordstown ticker ride stock dropped 95 thursday trading below 5 a share shares are up 68 in early friday trading still shares are down 80 over the past six months the sp 500 index is up about 13 over the same span while the dow jones industrial average is up about 11 lordstown isn’t alone though stock in 10 ev companies that merged with spacs are down 57 over the past six months on average it’s been a horrible span lordstown is the worst performer the best stock of the bunch has been fisker fsr whose shares are down about 25 over the past six months there are many reasons for the delays some are specific to companies lordstown for example has said it needs more cash to commercialize its first pickup truck dubbed endurance and changed its top management some aren’t companyspecific smallcap stocks have struggled lately the russell 2000 small capitalization index is down about 6 over the past six months with drops this steep investors are left wondering where the bottom is cash balances could be one way to estimate all the ev companies have cash on the balance sheet at some point investors could theoretically buy shares for its cash value and get the company for free investors of course need to remember ev companies are still far away from generating free cash flow from internal operations they are all startups xl fleet ‘s xl has cash equaling almost 50 of its market capitalization its stock is down about 66 over the past six months it’s a sign investors have lost some faith in its business model but it could also signal that the selling pressure might stop soon there is no rule of thumb however on what percentage of cash a startup should have on its balance sheet it all depends on cash generation and how much it costs to develop products in the car business it can take billions tesla tsla the company all other ev makers are chasing burned through about 9 billion over a dozen years before it started generating positive free cash flow tesla’s free cash flow on a fullyear basis was first positive in 2019 shares gained 26 that year free cash growth accelerated from there and tesla stock gained 743 in 2020 tesla has generated about 66 billion in free cash flow over the past three years