(Bloomberg) — A lawmaker is calling for an investigation of a $54.2 million, after-hours purchase of Oshkosh Corp. stock the day before the company won a blockbuster contract to build trucks for the U.S. Postal Service.
The transaction of 524,400 shares is bigger than Oshkosh trading volume for some entire days. The block itself amounted to almost 1% of the company’s publicly available shares and 74% of the firm’s 20-day average volume, according to data compiled by Bloomberg.
Oshkosh shares surged as much as 16% the next day, Feb. 23, and have risen further since. The holdings would be worth $59.6 million at Friday’s closing price of $113.65, 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,” Representative Tim 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 immediately respond to an emailed request for comment after normal business hours.
The Postal Service awarded the 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 Group Inc. 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 and email seeking comment.
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.
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