Journal Opinion: The Return of Steve Burns
YOUNGSTOWN, Ohio – Who saw this coming?
In a twist that stunned the business community, bankrupt Lordstown Motors Corp. announced Sept. 29 that it has agreed to sell its assets for $10 million to LAS Capital, whose majority owner is Steve Burns, the founder and former CEO of the electric-vehicle startup.
Burns was ousted as CEO amid allegations that company executives were not honest with investors about production capabilities and demand for its signature product, the Endurance pickup truck.
In the end, these investors lost millions while Burns walked away with nearly $67 million in stock sales.
The company’s unraveling began in March 2021, when Hindenburg Research published a devastating report just months after Lordstown Motors had gone public through a special purpose acquisition company, or SPAC. Hindenburg alleged the company made claims during Burns’ tenure that it had secured more than 100,000 preorders for the Endurance.
“Lordstown is an electric-vehicle SPAC with no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities,” the report said.
Shares of the EV manufacturer plummeted more than 19% the day the Hindenburg report was released. The stock never really recovered.
Meanwhile, Burns was slow to disclose an inquiry begun in February 2021 by the U.S. Securities and Exchange Commission regarding preorders of the Endurance and the merger with its SPAC. It wasn’t until a month after the SEC opened its investigation that Burns came clean. The U.S. Department of Justice subsequently launched its own probe. Both remain unresolved.
Under these clouds, Burns and former Lordstown Motors chief financial officer Julio Rodriguez left the company in June 2021. Now Burns and Rodriguez are buying what assets will remain post-bankruptcy reorganization.
Lordstown Motors says Burns and his LAS Capital was the most qualified bidder for its assets. We have no knowledge otherwise but presume the competition was sparse, if it existed at all.
Do Steve Burns and his mendacious gang think they got the last laugh?
No one in the Voltage Valley is amused.
Copyright 2024 The Business Journal, Youngstown, Ohio.
