Update: Lordstown Motors Stock Rises on Report of Possible Plant Sale
LORDSTOWN, Ohio — Shares of Lordstown Motors Corp. traded higher at midday on the heels of a report this morning that the electric-vehicle manufacturer is close to selling its plant to Taiwanese manufacturer Foxconn Technology Group.
According to a report by Bloomberg, and an announcement could come this week. A Reuters report today noted that the announcement could come this afternoon.
Shares of Lordstown Motors, which trades under the ticker symbol RIDE, were up 7% by 12:30 p.m. at $7.88 per share. The price had lurched as high as $8.93 immediately after the market opened at 9:30 a.m.
The deal would provide Lordstown Motors with an influx of cash that would help it to reach the large-scale manufacturing goals its set, while Foxconn — best known for manufacturing iPhones — would be getting its first automotive plant in the United States as it expands into car technology.
Lordstown Motors bought the plant from General Motors for $20 million in 2016 and received a $40 million mortgage from the major automaker to retool and upgrade the plant.
The 6.2 million-square-foot plant, formerly General Motors’ Lordstown Assembly, once employed more than 14,000 people, far ahead of current Lordstown Motors goals. Inside, large parts of the plant are unused and leaders have said that sharing the site is a possibility.
“The key to unlocking financial potential is maximizing the value of the Lordstown facility,” CEO Dan Ninivaggi said Aug. 26 following his appointment. “We are exploring a number of alternatives. It could take a number of different forms. That is Job One for me.”
Shares of Lordstown Motors, traded on the New York Stock Exchange under the symbol RIDE, closed Wednesday at $7.36. In after-hours trading, the share price rose to $7.83. In the last 52 weeks, the stock has traded as high as $31.57.
On Monday Goldman Sachs changed its rating from “neutral” to “sell.” Shares initially fell then rebounded by the end of the day.
Goldman Sachs analyst Mark Delany pointed to several challenges facing the electric-vehicle manufacturer, which has said it would begin a limited launch of pre-production models of its Endurance pickup truck at the end of September.
At the close of business Tuesday, there was no activity outside the plant that indicated some models had been produced. The plan is to manufacture vehicles for validation and regulatory approval in December and January and begin commercial delivery during the second quarter of 2022, executives said.
“We want to make sure we can hit it,” Ninivaggi told The Business Journal. “If there are ways to accelerate it, we will. But we have to have a successful launch. We won’t sacrifice speed or the number of units for quality.”
Foxconn has found great success as the world’s largest manufacturer of iPhones and is now looking to carry that over to the booming electric vehicle market. It’s recently announced a deal with high-end EV maker Fisker Inc., launched an open-source EV platform and made a deal with Thailand’s state-owned energy company PTT PCL.
The partnership with Apple could also carry on, as the tech company has been working on the Apple Car since 2018.
Earlier this year, a Foxconn executive said it was considering building an electric-vehicle plant in Wisconsin. That could be the same site of the company’s infamous $10 billion high-tech manufacturing plant, according to published reports. The project was promised billions of dollars in subsidies and is now largely abandoned.
In March, the chairman of Foxconn’s flagship manufacturing division, Young Liu, said the company was still trying to figure out what to make at the plant.
Copyright 2024 The Business Journal, Youngstown, Ohio.
