Lordstown Motors Corp (NASDAQ: RIDE) plunged 18.84% after two top executives stepped down and the company’s board discovered evidence of misstatement. The resignation of the executives comes days after the company said it didn’t have adequate cash to stay in business for the next 12 months.
Two Lordstown executives resign.
The company’s board of directors announced the resignations of founder and CEO Steve Burns and Chief Financial Officer Julio Rodriguez due to an internal inquiry into accusations brought by short-seller Hindenburg. Lordstown had indicated that the SEC was investigating its operations following the short seller’s claims that its tech was flawed and the pre-orders for its electric truck were nonbinding. According to Refinitiv statistics, Burns is Lordstown’s top shareholder, owning more than 26% of the company.
Lordstown admitted it exaggerated the quality of pre-orders for its electric trucks but dismissed Hindenburg’s claims that it exaggerated the technology’s feasibility and deceived investors about production plans as incorrect. Goldman Sachs, the advisor of the blank-check company that merged with Lordstown last October and assisted in the financing of the transaction, declined to comment.
In August last year, Lordstown stated it had $1.4 billion in pre-orders for its Endurance pickup truck when it revealed its plan to go public through a reverse merger. Lordstown said the pre-orders were non-binding after Hindenburg claimed the firm of deceiving investors about them, and it has now confirmed it had no binding orders.
Angela Strand appointed interim Lordstown CEO
The company’s main independent director, Angela Strand, has been nominated executive chairwoman to supervise the transition until a permanent CEO is appointed. On Tuesday, she will participate in a media event that Lordstown has planned for Burns and other officials. Strand stated in a statement, “We remain committed to delivering on our production and commercialization objectives.”