Shares of Lordstown Motors Corp. fell nearly 20% on Friday after short seller Hindenburg Research released a report on the electric truck manufacturer accusing investors of misleading investors and being a “ mirage. ”
Lordstown RIDE has misled investors “in terms of both demand and production capabilities,” Hindenburg said, citing discussions with former employees, business partners and documents showing “fictitious orders” and others that were non-binding agreements.
The report also quoted an unnamed former employee as saying that delays and design changes will ensure that the vehicles Lordstown has promised to produce by September are at least three to four years away from production. A recent road test ended with the vehicle catching, he said.
Lordstown did not immediately return a request for comment. The five analysts who study the stock and are polled by FactSet predict a string of quarterly losses for the company and revenue of about $ 114 million for the fourth quarter. Three out of five analysts rate the stock as a buy, the other two split between sell and hold calls.
Hindenburg targeted electric truck manufacturer Nikola Corp. in September. NKLA,
called it “a complicated fraud,” which the company disputed.
Lordstown Motors went public in October via a reverse merger with a blank check company.
The Ohio plant was owned by General Motors Co. GM,
making compact cars for the old carmaker, and would close as part of GM’s focus on more popular and profitable trucks and SUVs. It was then sold to Lordstown Motors.
The company said in January that it had more than 100,000 orders for its electric pickup truck. It said later that month that it was “on track” to start production of the truck, dubbed the Endurance, this year, with prototypes expected to arrive “in the coming weeks.”
Shares have almost doubled since the IPO. They have lost 27% this year, as opposed to a gain of about 5% for the S&P 500 index. SPX,