‘Lordstown Motors Week’ to Open Plant to Analysts, Investors
LORDSTOWN, Ohio –Lordstown Motors Corp. has taken the public relations offensive as it wrestles with declining stock value, a flurry of investor lawsuits and an inquiry by the Securities and Exchange Commission.
The electric-vehicle manufacturer this morning announced “Lordstown Motors Week” in June, a five-day event inviting analysts, customers and investors to the company’s headquarters as it prepares for the launch of its first product – the all-electric Endurance pickup.
Plant tours, interaction with Lordstown Motors’ executive team, presentations, and test drives of the Endurance are all part of the week’s schedule, the company said.
The event is designed to present stakeholders with a firsthand look at how the production team is preparing the factory for the early launch of the Endurance, billed by the company as the world’s first all-electric commercial pickup.
And, the plant will host three media days during the week: Monday, June 21 at 2:30 p.m.; Tuesday, June 22 at 2:30 p.m. and Wednesday June 23 at 8:30 a.m., the company announced.
Shares of Lordstown Motors shot up more than 11% to $8.18 per share by mid-afternoon Monday in the wake of the Lordstown Week announcement.
Commercial production of the Endurance is expected to begin by the end of September.
Lordstown Motors was initially scheduled to release its first quarter earnings results before the markets opened Monday. However, the company announced over the weekend that it would delay issuing those figures until after markets close on May 24.
Lordstown Motors also announced last week that it would restate its financials for 2020 after the SEC released new guidelines on how companies that were taken public through special purpose acquisition companies should report stock warrants at the time of the merger.
In recent months, Lordstown Motors has come under heavy fire from investors in the wake of a scathing short-seller report issued in March. The report, published by Hindenburg Research March 12, alleges that Lordstown Motors misled investors by claiming it had secured more than 100,000 pre-orders for the Endurance when it did not. The report also pointed out that the truck faced greater production hurdles than was known.
The fallout on Wall Street was swift: Lordstown Motors’ stock plummeted more than 16% the day of the report.
Since then, the report has served as the basis for at least seven investor lawsuits against the company, its directors, or former directors under predecessor DiamondPeak Holdings Corp.
DiamondPeak, a publicly traded special purpose acquisition company, or SPAC, merged with Lordstown Motors in October and listed Lordstown on the NASDAQ exchange under the ticker symbol RIDE Oct. 26.
Furthermore, the company acknowledged during its first financial conference with analysts March 17 that it was the subject of an SEC inquiry. The inquiry, launched in February, specifically requested information and documents related to the merger and the company’s pre-orders.
Lordstown Motors CEO Steve Burns said the company is cooperating with the inquiry.
Since February, the company’s share value has collapsed more than 75% and investors have responded with a string of lawsuits against Lordstown Motors and its executives, alleging securities fraud and other offenses.
The latest of these class action suits was filed Friday in U.S. District Court in Youngstown by FNY Managed Accounts. According to court papers, statements made by the company or its executives “artificially inflated” Lordstown Motors’ stock, causing investors to lose “hundreds of millions” of dollars.
The FNY complaint also calls into question Lordstown Motors’ battery and hub motor technology, considered hallmarks of the Endurance.
As an example, the latest complaint points to the San Felipe 250 race in Mexico. A “skateboard” version of the Endurance was forced to withdraw after just 40 miles because of poor battery performance.
The lawsuit alleges that Lordstown Motors misled investors when it announced it would “partner” with Brenthel Industries for the race. According to the complaint, Brenthel would provide “the proper safety and driver training to compete in the San Felipe 250.”
However, the complaint alleges that Brenthel constructed the entire vehicle and Lordstown Motors simply provided the four hub motors, wiring harness and an oversize battery pack.
“The Lordstown components installed on the truck Brenthel built for them failed almost before the race started,” court papers say. “It is the Brenthel-built truck and not the so-called Lordstown Endurance that competed in the San Felipe 250 as falsely claimed by Lordstown.”
The FNY lawsuit notes that the company made false and misleading statements when it touted its “proprietary software” and “proprietary battery configuration.”
Documents say the hub-wheel technology is licensed from Elaphe, a company based in Slovenia, and is not proprietary to Lordstown. Lordstown Motors announced a deal with Elaphe a year ago to develop the Endurance’s in-wheel motors.
Moreover, the lawsuit cites Morgan Stanley analyst Adam Jonas’ assessment on Feb. 12 that the hub motor technology has “never been commercialized” and that investors would be “exposed to significantly elevated execution risk.”
Shares of Lordstown Motors tumbled 13.34% the day the analysis was published, court documents say.
The lawsuit further claims that Lordstown Motors had “no proprietary battery configuration and no battery specific patents, but instead intended to rely on Tesla’s open-source patents from the Model 3.”
Beta models of the Endurance are now in production at the plant, a 6.2 million-square-foot factory that Lordstown Motors purchased in November 2019 from General Motors. Such vehicles are used for safety and validation tests.
In March, the company also announced plans to build a new, all-electric van that could serve as the first all-electric recreational vehicle.
Copyright 2023 The Business Journal, Youngstown, Ohio.