The top two executives at
CEO
The departures were announced on the same day that Lordstown responded to a scathing March report from the short-selling firm
Lordstown said that while its independent investigation found that the vast majority of the Hindenburg report was unsubstantiated, it acknowledged that one potential buyer that made a large number of preorders doesn’t appear to have adequate resources to make those purchases. Other preorders appear too vague or weak to be relied on, the company said Monday.
The report spawned four potential class-action lawsuits against Lordstown by investors who claim they were defrauded.
The resignations at Lordstown come less than a year after the founder of another electric vehicle startup,
Last week, Lordstown cautioned that it may not be in business a year from now as it struggles to secure funding to begin full production. In a quarterly regulatory filing, the company said that the
Yet Lordstown ran into trouble not long after it became a publicly traded company last year through a merger with a special-purpose acquisition company. Going public through a so-called SPAC is typically quicker than traditional initial public offerings that are usually handled by major financial institutions.
In January an Endurance pickup truck prototype caught fire 10 minutes into its initial test drive in
Company shares have been on a sharp, downward trajectory since February and the stock fell below the initial public offering price of around
That could get worse.
Burns, the departing CEO, is the company's largest shareholder with a 26.25% stake, according to FactSet.
Investors that still remain may not want to stick around to find out what happens if and when Burns begins to unload his shares, according to
That dynamic is playing out as Lordstown's operations are coming under increasing scrutiny, which it was partially shielded from when it went public through a SPAC.
SPACs can cut up to 75% off the time it takes for a company to get its stock trading on an exchange, versus the traditional process of an initial public offering. SPACs can also make it easier to get prospective buyers on board. Companies going the SPAC route often feel more license to highlight projections for big growth they’re expecting in the future, for example. In a traditional IPO, the company is limited to highlighting its past performance, which may not be a great selling point for young startups that typically fail to put up big profits or revenue.
Investors in Lordstown include
Lordstown named lead independent director
The company has hired an executive search firm to seek out a new CEO and chief financial officer.
AP Business Writer
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