Lordstown Motors Stock Crashes to 52-Week Low
LORDSTOWN, Ohio – Shares of Lordstown Motors Corp. plummeted Thursday, closing at a 52-week low hours after the company hosted a brief shareholder meeting.
Lordstown Motors’ stock closed down 9.5% to $4.77 per share at the end of regular day trading, the first time the stock has fallen below $5. The stock, which is listed under the ticker RIDE, had been trading lower all day and never regained its footing in the afternoon.
A spokeswoman from Lordstown Motors confirmed the noon shareholders meeting lasted between 10 and 12 minutes.
During the meeting, Executive Chairwoman Angela Strand recapped her earlier statements that Lordstown Motors would begin limited production of its first vehicle, the all-electric Endurance pickup, by the end of September, the spokeswoman said. The limited launch would be followed by validation and regulatory approval in December and January.
The electric-vehicle startup announced last week that it expects to begin commercial delivery of the Endurance during the second quarter of 2022.
Shareholders voted on two measures and approved using KPMG as an independent accounting firm and the reappointing two board directors, the spokeswoman said.
There were no questions from the shareholders.
Lordstown Motors has struggled to regain the confidence of investors since March, when Hindenburg Research published a scathing short-seller report alleging that company executives exaggerated the number of preorders for the Endurance. The report also said that the company was short on cash, and did not have enough resources to produce the Endurance.
RIDE stock is down 75.6% since the beginning of the year.
On June 8, Lordstown Motors issued a “going concern” notice as part of its amended 2020 annual report, warning that it might not be able to remain in business through May of 2022. It’s two top executives, CEO Steve Burns and Chief Financial Julio Rodriguez, resigned from the company June 13.
Burns was replaced by Strand and Becky Roof was hired as the new CFO.
Additional pressures were placed on the company when it was disclosed earlier this year that the U.S. Securities and Exchange Commission had launched an investigation into Lordstown Motors’ preorders and its merger with blank check company DiamondPeak Holdings Corp.
DiamondPeak, a special purpose acquisition company, or SPAC, took Lordstown Motors public in October.
In August, Lordstown Motors also confirmed that the U.S. Department of Justice has initiated an investigation into the same matters.
Meanwhile, Lordstown Motors continues to search for new investors and equity partners to raise additional capital to fund production of the Endurance.
In July, Lordstown Motors announced that it had secured an equity deal with a hedge fund managed by Yorkville Advisors that could extend as much as $400 million into the operation if necessary.
And last week, the company said that it was open to leasing portions of its 6.2-million-square foot plant – the former General Motors Lordstown assembly complex — to other manufacturers in order to raise additional revenue.
“Serious discussions are now underway with several potential partners, and we expect that many more will become attracted to the potential of our factory,” Strand said during a conference call Aug. 12. “This is a critical, strategic pivot for us.”
Copyright 2023 The Business Journal, Youngstown, Ohio.