Lordstown Motors Corp (NASDAQ: RIDE) is officially at risk of going bankrupt and shares of the electric vehicle maker fell 17% after the opening bell. The company has stated in the filing they recently sent to the United States Securities and Exchange Commission. The company now doesn’t think it’ll be in business much longer.
The company’s CFO Julio Rodriguez and CEO Steve Burns have resigned on Monday. This is when an internal investigation is going on with respect to it misleading investors. The company faked orders to raise capital for its Endurance electric pickup.
Lordstown stated that it would have to finish developing and manufacturing its electric cars, get regulatory approval, start producing the vehicles on a commercial scale, and officially launch them into the market for it to continue doing business. The company didn’t say much more than that in the filing. They clarified that they were still looking to start producing the cars by the end of September this year.
Also listed on the company filing was a cash of $259.7 million as of March 31, after it posting a net loss of $125.2 million over the last three months. Lordstown Motors was listed last year after it merged with a SPAC. It is now looking to be financed further.
This news has seen the company’s stock prices drop by 8%. However, this isn’t entirely a new thing for it. Steve Burns, the company’s CEO, had already asked for additional capital a while back. The media in the United States suggested that if the company didn’t manage to get additional financing, the company could end up being able to make around 1,000 cars only, or even less. This is nowhere near the number they projected when launching the Endurance, which claimed it’ll produce 20,000 of them in 2021.
This report has added fuel to what Hindenburg previously alleged. Hindenburg targeted Lordstown this spring and said that they doubted the company had 100,000 pre-orders. It further stated that they found this amount “largely fictitious.” The Endurance vehicle prototype was also believed to have burned out when it was road-tested for the first time in January of this year. This was something the SEC was investigating.
The Endurance was unveiled in the summer of 2020 in front of Mike Pence, a former Vice President of the United States. The electric pickup is powered by 4-wheel hub motors, which altogether are designed to produce 448KW. It was reported that LG Energy was the one entrusted with providing the battery cells.
Meanwhile, the company still needs to deal with the fact that many of its competitors are coming up with electric pickups of their own. For starters, Ford has finally launched their new F-150, which is their own version of an electric pickup.