Workhorse Sells Lordstown Motors Stock, Takes $52.1M Loss

LOVELAND, Ohio — Workhorse Group Inc. on Monday reported that it has sold 11.9 million shares of Class A common stock in Lordstown Motors Corp., and “recorded a loss of approximately $52.1 million.”

According to a document filed with Securities & Exchange Commission, Workhorse sold the stock from July 1 though Aug. 6 “at an average price of $6.67 per share for expected net proceeds, after transactioin expenses and brokers’ commissions, of approximately $78.8 million.”

As of June 30, Workhorse reported its investment in Lordstown Motors was valued at $182.3 million.

In its quarterly report, Workhorse said it lost $43.6 million during the three months ended June 30.

The company signed a deal with Lordstown Motors last year in which Workhorse would provide technology on a new pickup it was developing in exchange for about a 10% equity in Lordstown Motors. The stock sale reported today accounts for about 72% of the shares Workhouse received in equity.

Lordstown Motors has said it expects to launch its first vehicle, the all-electric Endurance pickup, in late September.

It’s not clear, according to the latest SEC filing, whether Workhorse sold its stock on the open market or as block to a single investor.

On July 30, Workhorse announced it had parted ways with its CEO, Duane Hughes. Richard Dauch, former CEO of Delphi Technologies, was hired on as the company’s new CEO effective Aug. 2.

Workhorse Group was founded by Steve Burns, who resigned as CEO in 2019 to form Lordstown Motors. On June 13, Burns resigned as Lordstown’s CEO after an internal investigation found that certain executives had made misstatements about the number of preorders for the Endurance. Chief Financial Officer Julio Rodriguez also resigned.

In October 2020, Lordstown Motors went public through a reverse merger with DiamondPeak Holdings Corp., a special purpose acquisition company, or SPAC. The company has confirmed that the SEC and the U.S. Department of Justice have initiated investigations into the merger and Lordstown Motors’ preorders.

Lordstown Motors is in a quest to raise additional capital to launch the Endurance. Last month, the company announced that it had reached an equity deal with Yorkville Advisors Global potentially worth $400 million.

Copyright 2021 The Business Journal, Youngstown, Ohio.