LORDSTOWN — Lordstown Motors Corp. is set to face its investors today, following months of negative publicity and a deluge of lawsuits from disenfranchised investors alleging securities fraud and insider trading.
The electric vehicle startup has scheduled its Q1 earnings conference call for 4:30 p.m. today, after market close. You can listen to a live webcast of the call at Investor.LordstownMotors.com. An archive of that webcast will be available shortly after the call.
Lordstown Motors still has not directly answered a damaging short-seller’s report released in March, which alleges the company’s purported 100,000 pre-orders are largely fictitious, and that production of its first product, the Endurance all-electric pickup truck, is far behind on its goal to begin mass production in September 2021.
Instead, the company’s board of directors formed a special committee to review the allegations, CEO Steve Burns said during the company’s FY2020 earnings call.
During that call, Burns also announced the company was complying with a U.S. Securities and Exchange Commission inquiry.
The company’s Q1 earnings call was rescheduled from earlier this month as the company worked — at the instruction of the SEC — to restate its outstanding stock warrants as liabilities rather than components of equity on its financial statements from last year and the first quarter of this year.
Stock warrants allow holders to buy company stock at a certain price and on a certain date, making them a potential source of future capital, according to Investopedia.
Of the company’s 13.4 million outstanding warrants at the end of 2020, $82 million-worth were exercised for cash proceeds to Lordstown Motors. Nearly 4 million remained outstanding by the end of March. Those warrants were issued by DiamondPeak Holdings Corp., the special purpose acquisition company, or SPAC, that merged with Lordstown Motors in October, making it a publicly traded company.
Since market research firm Hindenburg Research published its damaging deep dive into Lordstown Motors’ viability on March 12, the company’s stock has tanked, from closing nearly $18 a share on March 11 to closing at an all-time low of just under $7 on May 13.
In that two-month span, Lordstown Motors has been named a defendant in seven separate class action lawsuits filed in federal courts by investors alleging Lordstown Motors executives committed various securities violations, including fraud and insider trading. Those suits have since been consolidated.
The first suit was filed the day after Lordstown Motors’ FY 2020 earnings call in March. The most recent, filed May 14, alleges several Lordstown Motors executives dumped nearly 250,000 shares — the “vast majority of their holdings” — when RIDE was trading at near all-time highs, for a combined profit of nearly $8.6 million.
Had they held the stock, those executives stood to lose nearly $5.8 million by March 24, according to the suit.
Lordstown Motors Corp. stock (NASDAQ: RIDE) last week rallied 36 percent to $11.45 after it announced a week-long community relations event including tours of its Hallock Young Road factory and test drives of the Endurance.
But RIDE leveled out Wednesday, after Ford Motor Co. unveiled its all-electric pickup truck, the F-150 Lightning, which is expected to have a $40,000 price tag, more than $12,000 cheaper than the Endurance's.
The stock closed at $9.58 Friday.
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Check back here for updates following Lordstown Motors’ investor call at 4:30 p.m.
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May 24, 2021 at 03:05PM
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After months of bad news, Lordstown Motors is facing investors today - Mahoning Matters
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