RIDE – Lordstown Motors Debut Earnings Report Gets Clouded In SEC Inquiry Reveal
Lordstown Motors Corporation (NASDAQ: RIDE) CEO Steve Burns on Wednesday told investors during a post-earnings call that the company is cooperating with an information request from the SEC related to accusations of misleading claims by a short seller.
What Happened: Shares of the electric startup fell 3.25% in after-hours trading on Wednesday after the reveal. On Friday, short seller Hindenburg Research released a report accusing Ohio-based Lordstown Motors of using “fake” orders to raise capital and the progress it was making toward producing its first model.
The short-seller has a short position in the electric vehicle startup, which means it stands to profit if the company’s share price declines.
Lordstown Motors on Wednesday announced its first quarterly results since going public. The company reported a net loss of $38.2 million on $38.5 million in operating costs for the fourth quarter.
In his opening remarks, Burns revealed the SEC request to investors.
“We are aware of the short seller’s report. We’ve also received a request for information from the SEC, and we are cooperating with that inquiry,” said Burns.
“In addition, the board of directors has formed a special committee to review these matters.”
Why It Matters: Hindenburg’s report called Lordstown’s order book a “mirage” and said the company paid an outside consultant to generate pre-orders before its deal to go public last year. It cited documents and conversations the firm said it had with former employees and business partners.
Burns has previously said the report contained half-truths and lies.
Lordstown reiterated plans to begin producing its Endurance electric pickup truck in September as planned, with a plan to build its test vehicles by March.
Price Action: Shares of Lordstown were down 3.25% at $14.6 in after-hours trading on Wednesday and have fallen about 13% since March 12.
Photo courtesy: Trump White House Archive via Flickr
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