![]() Ninivaggi, a former CEO of Icahn Enterprises L.P. The probe led to a leadership shakeup at Lordstown during the summer and a Mr. The SEC probe into Lordstown’s Endurance pre-order numbers is ongoing and it is the direct result of a short-seller report on the EV startup. The second reason is that the EV startup has been caught in the crosshairs of The Securities and Exchange Commission for, allegedly, inflating the number of pre-orders which were said to have exceeded 100,000 in January 2021. Under the agreement, the hedge fund could buy up to 35.1M shares at which point it would own 19.9% of Lordstown. To address the need for capital, Lordstown entered into an agreement with investment firm Yorktown Advisors in July 2021 which agreed to purchase $400M worth of shares over a three-year period. One reason is that the EV maker is still in the development stage and production has fallen behind schedule, which is delaying deliveries of the startup’s all-electric commercial pickup truck, the Lordstown Endurance.īecause of a delayed timeline in production, liquidity concerns started to weigh on Lordstown’s valuation and the EV startup was forced to look for additional capital to finance the production of its first-ever production car. There are a couple of reasons why Lordstown has underperformed in recent months. Lordstown is now trading around $6.40, significantly below the listing price, as the EV maker faces a number of challenges. Shares of Lordstown opened at $18.80 the first day of trading and inched up to a high of $31.80. The EV maker, which is still in the development stage and doesn’t have a commercial product yet, finalized a merger with special-purpose acquisition company DiamondPeak Holdings Corp. Lordstown was yet another electric vehicle company that went to market in 2020. Shares trade at a deep discount to the listing price and may revalue significantly higher if the company succeeds in bringing its first pickup truck to market! Why Lordstown may be worth the risk Lordstown added it ended 2021 with a cash balance of $244 million, $79 million above the midpoint of the previously issued outlook on disciplined spending, favorable working capital, additional equity issuances and a deferral of certain investments into 2022.Electric vehicle startup Lordstown Motors ( NASDAQ: RIDE) is in a high risk, high reward situation. This was comprised primarily of $100 million in down payments by Foxconn for sale of the Lordstown facility, $50 million from the sale of common stock to Foxconn and $30 million in other equity issuances an additional $50 million down payment from Foxconn was received on January 28, 2022. The company said it raised $182 million in capital in the fourth quarter. Our ongoing discussions with Foxconn are focused on reaching a definitive agreement for the joint development of future vehicles off the MIH platform with an appropriate funding structure to enable us to raise the necessary capital for the success of our partnership.” I believe the Foxconn partnership is a critical step in unlocking the full potential of the Lordstown facility and brings multiple benefits to LMC. ![]() ![]() ![]() “We executed the asset purchase agreement with Foxconn and have made substantial progress on the terms of our contract manufacturing agreement, subject to review by the Committee on Foreign Investment in the US (CFIUS). “The fourth quarter marked a significant strategic shift for Lordstown Motors,” said Dan Ninivaggi, chief executive officer of Lordstown. ![]()
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