Former Lordstown Motors CEO Cashes Out
LORDSTOWN, Ohio – The former CEO of Lordstown Motors Corp. has liquidated his remaining shares in the company he founded and from which he resigned two years ago.
According to a regulatory filing submitted Wednesday, Stephen S. Burns recently sold off nearly $3.9 million worth of common stock – the last of the more than 46 million shares the former CEO once owned when the company went public in October 2020.
The filing shows Burns no longer has any interest in the company. The latest filing shows that Burns sold off a total of $3,857,712.48 in stock between May 23 and June 6. His last sales transaction was June 6, jettisoning 591,752 shares of common stock at $4.99 per share.
In all, Burns has cashed out more than $66.3 million in Lordstown Motors stock – which trades under the ticker symbol RIDE – since he resigned from the company in June 2021.
Burns began to shed RIDE stock in November 2021. Under an agreement with the company, half of his stock holdings were locked until October 2021, and the other half until October 2022.
Burns established Lordstown Motors in 2019 and helped the company acquire the former General Motors Lordstown plant to produce what he then deemed would be the first all-electric pickup for the commercial market, the Endurance.
The company went public via a special purpose acquisition company, or SPAC, in October 2020.
However, a short-seller report in March 2021 alleged that Lordstown Motors’ “preorders” for the Endurance were fabricated. The allegations led to an investigation by the SEC and the U.S. Department of Justice, which are still ongoing.
Burns resigned after an internal inquiry determined that certain executives made misleading comments and remarks about preorders for the Endurance.
After Burns’ resignation, new leadership assumed control at Lordstown and spearheaded the sale of the plant to Foxconn for $230 million in May 2022. That deal also came with a contract manufacturing agreement where Foxconn would produce the Endurance, as well as an investment deal in which Foxconn pledged to invest $170 million into Lordstown’s operations.
That deal appears to be in jeopardy, as Foxconn has not closed on $47.3 million that was part of the equity purchase agreement. Foxconn claimed that Lordstown Motors was in violation of the agreement because in April its stock value fell below the minimum bid price of $1 on Nasdaq for more than 30 days, triggering a delisting notice.
Lordstown Motors on May 24 initiated a 1:15 reverse stock split, which combined 15 shares into a single unit, thereby boosting its value over $1. The company has since been informed that it is in compliance with Nasdaq rules.
Still, Foxconn has as not closed on the equity purchase, and Lordstown Motors has threatened to sue Foxconn should it not make good on its investment pledge.
RIDE stock closed up 1.7% on Wednesday at $3.56 per share.
Copyright 2024 The Business Journal, Youngstown, Ohio.
