Special to The Review
LORDSTOWN — Delivery truck manufacturer Workhorse Group Inc., an early investor in Lordstown Motors Corp., is under investigation by the U.S. Securities and Exchange Commission, according to a report in the Wall Street Journal.
The newspaper reported the regulatory agency’s enforcement division has been probing the startup from the Cincinnati area, according to a June 30 letter denying a public records request from a self-described short-seller. Short selling occurs when an investor borrows a security and sells it on the open market, planning to buy it back later for less money.
A spokesman for Workhorse did not respond to an email seeking comment.
Last month, Workhorse sold nearly three-quarters of its equity stake in Lordstown Motors when it unloaded 11.9 million shares of the Lordstown-based electric truck startup’s Class A common stock July 1 to Aug. 6.
The sale netted Workhorse about $78.8 million, but the company reported to the SEC it booked a $52.1 million loss with the sell-off.
Workhorse Group and Lordstown Motors early on partnered on a three-year license agreement that gives Lordstown Motors access to certain intellectual property in exchange for 10 percent stake in the company, which plans to launch its all-electric pickup truck, the Endurance, in limited production sometime this month.
Both companies were founded by Steve Burns, who abruptly resigned as Lordstown Motors CEO in June. No reason was given for his stepping down, but the move came in tune with an admission by the company that statements regarding preorders for the company’s flagship truck, the Endurance, were inaccurate.
Lordstown Motors is also the subject of a probe by the SEC, which has issued two subpoenas in its investigation into its merger in October with special purpose acquisition company DiamondPeak Holdings Corp. of New York.
The U.S. attorney’s office in Manhattan also has opened a probe into the matters.
In February, Workhorse was passed over for a $6 billion contract to make the next generation of vehicles for the U.S. Postal Service, which instead went with Oshkosh Defense, a division of Wisconsin-based Oshkosh Corp.
Workhorse sued in the U.S. Court of Federal Claims. The case is pending with oral arguments set for Sept. 15, according to the court’s online docket.
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September 03, 2021 at 11:28AM
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SEC probes Workhorse, early equity investor in Lordstown Motors - The Review
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