Shares of Lordstown Motors EV sink, CEO, Automotive News after CFO departure

Shares of manufacturer Lordstown Motors EV came under pressure once the SPAC darling said his two senior management had resigned and his management had found evidence of inaccurate statements.

Lordstown Motors Corp. announced the violent departure of its two top executives and said its board had found misstatements, leading to confusion with the electric vehicle manufacturer and the SPAC star.

CEO Steve Burns and Chief Financial Officer Julio Rodriguez have resigned from the company, they said they were immediately effective, the company said in a statement Monday. Burns declined to comment on the output in a text message.

It’s the company’s latest setback, as it warned last week that it may not have enough money to fund the development of its first truck or survive the next 12 months if it is unable to raise more capital. In March, the launch provided a probe into the operations of the Securities and Exchange Commission after a short salesman said his technology was faulty and that the truck’s pre-orders were not binding.

The company’s shares fell 18% in New York from 9:32 a.m. to 15 percent to a $ 9.69 trade. The stock is down about 52% this year.

Lordstown is one of a wide range of electric vehicle startups to buy special targets through mergers with so-called companies or SPACs, which have been controversial as they have taken public companies out of young businesses. revenue or commercially viable products. Combined with DiamondPeak Holdings, Lordstown earned $ 675 million in the October deal.

Lordstown is one of a wide range of electric vehicle startups through mergers with special purpose companies or SPACs to purchase special targets.[File: Steve Burns/Bloomberg]

The company said in a separate document that a commission of inquiry concluded that it had made incorrect statements about its vehicle prepayments. He mentioned cases that came from commercial fleets when the probe launcher had incorrectly claimed orders, instead of third-party management companies or “agents” who had no intention of buying the trucks directly.

In addition, some prepayments are unlikely to make it apparent to buyers that they may have the resources or commitments to comply with orders that have been “too vague or ill to properly access the full number of prepaid orders”.

The commission concluded that other allegations made by the short-seller Hindenburg Research in March were “false and misleading” in many respects.

Appointed interim CEO
Angela Strand has been named CEO of the company, and will oversee the company until the new CEO is identified. Becky Roof, who previously served as interim chief financial officer of other corporations, will do the same in Lordstown.

Short salesman Hindenburg sued Burns from his former company, Workhorse Group Inc. that they had to move out of the former company, left that company in 2019 and founded Lordstown. Burns denied Hindenburg’s allegations.

Burns ’violent departure and finding that Lordstown made the wrong statements during his tenure are similar to what happened at Nikola Corp., another electric vehicle that was made public through the company of empty checks. Nikola’s founder and CEO also resigned after Hindenburg was directed to mislead investors into the company, something the startup later confirmed.

Lordstown turned his attention to him when he closed his General Motors Co. plant in Youngstown, Ohio, with plans to manufacture his own vehicles. The move was praised by President Donald Trump’s administration after it promised to return thousands of workers who lost their jobs when the plant closed in 2019.

The departure of the two senior executives from Lordstown will come at a difficult time for the company as it seeks to move from research and development to commercial production of the first model.

“We remain committed to meeting production and marketing goals while maintaining the highest standards of operation and performance and creating value for shareholders,” Strand said in the statement.

(Updates with shares opened in the fourth paragraph.)
–With the help of Anne Riley Moffat.