SAN FRANCISCO — Lordstown Motors mentioned on Wednesday it had acquired a request for info from the U.S. securities regulator concerning accusations by an investor that took a brief place within the inventory and accused the electrical truck startup of deceptive customers and buyers.
Final week, Hindenburg Analysis revealed it had taken a brief place in Lordstown Motors, accusing the corporate of utilizing “faux” orders to lift capital and claiming that its upcoming truck is three to 4 years away from manufacturing.
“We’re cooperating with that inquiry,” Lordstown Motors CEO Steve Burns mentioned throughout an earnings convention name, referring to the U.S. Securities and Change Fee’s request for info.
He additionally mentioned Lordstown’s board of administrators has shaped a particular committee to assessment the issues.
Burns mentioned Lordstown received’t straight tackle Hindenburg’s accusations. The truck is on schedule to be inbuilt September, with a plan to construct its take a look at automobiles this month, Burns mentioned, a timeline Hindenburg’s report had doubted.
Curiosity from prospects signifies robust demand, Burns mentioned. Lordstown and founder Burns have been accused of deceptive buyers by exaggerating orders for the Endurance.
“Our interplay with our buyer has allowed us to gauge demand,” Burns mentioned on the decision. “This gauge is vital as a result of tooling can price a whole lot of thousands and thousands of {dollars}. We’re within the means of increasing our manufacturing capability to 60,000 vehicles a 12 months.”
Quick sellers wager that the value of a inventory will fall by borrowing shares within the hope of shopping for them again at a less expensive value and pocketing the distinction.
Shares of Lordstown Motors have been down 5% in prolonged buying and selling on Wednesday.
“Our conversations with former workers, enterprise companions and an intensive doc assessment present that the corporate’s orders are largely fictitious and used as a prop to lift capital and confer legitimacy,” Hindenburg mentioned final Friday.
He mentioned Wednesday that buyer curiosity had exceeded the corporate’s expectations.
The corporate in 2019 acquired a shuttered Normal Motors plant in Lordstown, Ohio.
It additionally plans to unveil the demonstration mannequin of its second automobile, an electrical van, this summer season, with a purpose to begin manufacturing within the second half of 2022.
Lordstown reported a lack of 23 cents per share through the October to December quarter.
In its report, Hindenburg mentioned Lordstown is an organization “with no income and no sellable product, which we consider has misled buyers on each its demand and manufacturing capabilities.”
However the firm has been upfront about not having income from automobile gross sales, and is spending money getting its truck into manufacturing.
The corporate had $630 million in money on the finish of the 12 months. With projected capital expenditures of $250 million to $275 million in 2021, and $220 million to $235 million in working prices and R&D, Lordstown expects to complete this 12 months with not less than $200 million in money. The corporate is making use of for a mortgage from the U.S. Division of Vitality beneath the Superior Know-how Automobiles Manufacturing program.
Materials from Bloomberg was used on this report.
