Important events
May 132022
The RIDE of its life
RIDE goes on a relief rally after Lordstown at last completes the sale of its Ohio factory to Taiwanese company Foxconn.- RIDE shares pumped 47% on Thursday after a $230m deal was pushed over the line to give its Ohio factory to Foxconn. The deal will alleviate pressure stemming from supply chain probs and rising resource prices, with the Taiwanese manufacturer set to oversee some of the capital intensive costs.
- Foxconn manufactures iPhones for Apple, so these guys now how to deal with demanding deadlines and turnovers. By handing them the keys, Lordstown hopes to pick up manufacturing rates of its flagship pickup truck, Endurance, which could prove to be a hit in US market that has a high demand for EVs.
- Lordstown will be wiping the sweat off its brow now this deal is settled, as any further delay to signing the deal would’ve led to Foxconn asking for its $200m deposit back, which is money the EV maker… doesn’t really have. Its Q1 earnings were bleak to say the least – a wider than expected loss of $0.46 per share.
Lordstownmotors
Subscribe to Snaps
See the market snapshots that matter and nothing else – sent to your inbox daily. Designed to be read in 20 seconds or less.
May 102022
Stuck at an intersection
Up-and-coming EV maker Lordstown Motors reports a better-than-expected quarter that gets slowed down by the weight of the market in the trunk.- Shares closed Monday down 6.5% after opening down around 9% following its Q1 report. Let’s preface this by saying that for a pre-sales company earnings aren’t so important, but Lordstown reported a wider than expected loss at $0.46 per share.
- On the upside, it only burned through $91m while analysts expected that number to be more around the $140m mark. However, the company will need cash soon and its future hinges on an unfinished deal to sell its Ohio factory to Foxconn, so investors are hoping that goes through A$AP Rocky.
- How's production going though? Lordstown is hoping to begin production of its electric truck this fall (around a year later than originally planned), but rising costs mean that for now it’s gonna lose money on every one it sells. Ouch.
Lordstown Motors
Mar 012022
Lordstown’s lacking earnings
Electric vehicle maker Lordstown Motors slows right down after its Q4 earnings are punctured by uncertainty.Key points:
- The stock plummeted nearly 20% on Monday after its fourth quarter brought in a net loss of $0.42 per share – the electric leader is still in the pre-sales stage though, so forecasts and cash flow are more important to investors.
- Production plans for the year were underwhelming at best. The company now aims to start production in Q3 and make 500 cars this year, compared to the 2,000 it originally planned. Execs said they need to raise $250m to cover production costs, especially given the fact that its $230m sale of an Ohio factory to Foxconn has yet to be finalized.
- But, it did end 2021 with $244m in cash, way up from the $180m it expected to boast, thanks to disciplined spending, better capital management, and the deferral of investments. But, that’s not enough to quell fears that Lordstown isn’t getting its EVs to market quick enough.
Nov 122021
Investors enjoy the ride
Lordstown Motors might be at a standstill at the moment, but investors are gearing up for a speedy take-off.- Prices gained 24% after a mixed bag of earnings, posting narrower than expected losses but suffering from production delays.
- It’s expected to book revenue soon from its deal to sell its Ohio plant to Foxconn for $213m – people were pissed because Lordstown was so desperate for cash for its Endurance EV pickup that it let Foxconn underpay for its stock options.
- The deal has delayed the Endurance anyway, with the first car due in Q3 2022.
- The SEC is still sniffing around its IPO, but investors focused on the positives – capital expenses are down from $400m to between $330m and $350m, so hopefully revenue is on the way.
Oct 062021
Lordstown continues its downward spiral
Electric vehicle maker Lordstown Motors slows its roll, closing the day down 11% after a downgrade from Morgan Stanley, continuing its October spiral.Lordstown Motors is down nearly 35% in October alone so far, losing ground after the company bumped its expenditure forecast for the year and made an unfavourable deal with Hon-Hai Precision Industry. Things got worse yesterday after Morgan Stanley handed the automaker a downgrade from Hold to Sell, and cut his price target from $8 to $2 – which would be a 65% decline from Monday’s closing price of $5.85. The analyst's primary concern is the recent Hon-Hai Precision Industry deal, which will see Lordstown sell one of its factories at a significantly lower cost to bring in cash flow for its Endurance truck. The analysts said:
We had previously assumed the Endurance project would be cancelled as we do not see a path to commercial viability at any appreciable scale. (Continuing with the Endurance) likely exposes the company to the risk of further elevated cash burn and liquidity risks even in a contract manufacturing scenario.
The stock ended Tuesday down 11.11% at $5.20.
Jul 202021
Lordstown confirms DoJ investigation
Lordstown Motors starts the week off with a dip of over 4%, building on similar losses from Friday after the EV start-up confirmed the DOJ had launched a probe into its recent SPAC listing.Shares of EV company Lordstown Motors ended last week with a slump of around 4% and started Monday on the wrong side of the bed with another dip. Less than two weeks ago, rumors started swirling that there could be a federal inquiry into Lordstown’s SPAC and the number of vehicle pre-orders reported, and the EV start-up confirmed the probe late on Thursday night. The SEC first started sniffing around in February on claims that Lordstown execs lied to investors about the firm’s pre-order numbers before going public via a SPAC last year. Since then, Lordstown has ousted its CEO Steve Burns CFO after the board concluded there could be some truth to the claims, causing shares to plummet 18% on June 14.
(Lordstown) received two subpoenas from the SEC for the production of documents and information, including relating to the Merger between DiamondPeak and Legacy Lordstown and pre-orders of vehicles, and we have been informed by the U.S. Attorney’s Office for the Southern District of New York that is investigating these matters,
confirmed the company.
Jul 052021
Justice Department starts sniffing
EV start-up Lordstown Motors sees prices pump the brakes, falling 10% as the Justice Department adds to its regulatory woes.Shares of Tesla competitor Lordstown Motors took a hit of 10% Friday on the back of news that the U.S. Justice Department is joining the SEC and launching a probe into the electric vehicle company. The SEC first started sniffing around in February on claims that Lordstown execs lied to investors about the firm’s pre-order numbers before going public via a SPAC last year. Since then, Lordstown’s founder and CEO Steve Burns and his CFO have been ousted, after the board concluded there was some truth to the claims, causing shares to plummet 18% on June 14.
Now federal prosecutors are jumping on the bandwagon, with the Justice Department also opening up an enquiry into business matters at Lordstown Motors. Though it’s not been made clear exactly what they’ll be looking for, it's likely to be related to the controversial public offering process. The probe couldn't come at a worse time for the company, which earlier this month admitted that it was having problems with cash flow.
Lordstown Motors is committed to cooperating with any regulatory or governmental investigations and inquiries. We look forward to closing this chapter so that our new leadership – and entire dedicated team – can focus solely on producing the first and best full-size all-electric pickup truck, the Lordstown Endurance,
company spokesman Ryan Hallett said.
Jun 162021
Ride into the red for Lordstown
EV truck maker Lordstown Motors takes another ride into the red with a 18% drop after both its CEO and CFO jump ship.Lordstown Motors has had a rollercoaster month so far, kicking off last week with the news that it likely won't have enough funds to carry on for even one more year unless it secures some cash, which sent prices spiralling down by over 16%. Now shares are on the decline again, losing 18% on Monday on the back of news that its CEO Steve Burns and CFO Julio Rodriguez have both jumped off the sinking ship.
The drama started a while back when the company was stung by accusations that it misled investors by exaggerating demand for its Endurance pickup truck. A report came out at the start of this week with the findings of the probe, titled “The Lordstown Motors Mirage: Fake Orders, Undisclosed Production Hurdles, And A Prototype Inferno,” and it’s pretty damning. Ouch.
The findings led to an executive shake up and the ousting of its CEO and CFO. But despite the price decline, there are many that think the move was an important and necessary step forward for Lordstown if it’s gonna make it in the EV space.
We felt it was untenable for the company to secure necessary new capital with a management team widely seen as potentially not leading the company into the next era of its development,
Morgan Stanley analyst Adam Jonas said.
Not all is lost though - the stock made a quick recovery yesterday, clawing back up 11% on the back of news that production plans remain on track. Angela Strand, who was appointed as the new Chairwoman after the exec shake-up, gave investors some hope with news that the company has found enough funding to operate through to next year, calling it a “new day” for the EV maker.
Jun 102021
Tesla competitor struggles to keep up
The EV market might be heating up, but Tesla competitor Lordstown Motors is struggling to hold its ground. The start-up takes a hit of 16% on the back of a warning that it might not have enough money to last another year.EV start-up Lordstown Motors is relatively new to the electric vehicle market, and went public recently via a reverse merger with a SPAC. But it has made a name for itself as a worthy competitor in the space, and some think it could give Tesla a run for its money. Since the firm started trading in October, its share price has been on a rollercoaster ride, doubling in value last year as starstruck investors seeking Tesla gains went on the hunt for the next EV winner, then taking a hit in 2021 when it was accused by a short seller of inflating orders. Just four months ago, Lordstown boasted a $5 billion market valuation, but as of Wednesday last week that valuation tumbled to around $2 billion after a cash flow warning.
In a filing with the SEC last week, Lordstown Motors revealed severe issues funding vehicle production, and that there’s substantial doubt as to whether it’ll be able to keep going. The EV company amended its annual report to say that in a year’s time it may not function as “a going concern” – its current cash and cash equivalents were only worth around $587 million as of the end of Q1, and there is no longer enough funding to launch its latest EV pickup.
The company believes that its current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles. These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year,
the company warned.
There might be a last-minute reprieve. The firm said last week that it’s already in talks with a bunch of different people to secure funding, which has pushed the share price back into positive territory.
With significant asset value , management focus on securing capital, and still widely available capital for AutoTech entrants, we are hesitant to draw a conclusion that RIDE will not be able to line up additional funding,
Bank of America industry analyst John Murphy wrote.