Lordstown Motors (RIDE) - Get Free Report said Monday that CEO Steve Burns will step down following an independent investigation into allegations made by short-seller Hindenburg Research that called the company a "mirage'.
Burns, as well as CFO Julio Rodriguez, will resign following the publication of what Lordstown called an investigation by a "special committee" into a damning report by Hindenburg that it called "in significant respects false and misleading" but nonetheless raised issues regarding the accuracy of Lordstown statements on pre-orders of the company's flagship Endurance electric truck.
Angela Strand has been named as executive chairwoman and will "oversee the organization’s transition until a permanent CEO is identified", Lordstown said. Becky Roof will act as interim CFO.
Hindenburg alleged in March that Lordstown is an "electric vehicle SPAC with no revenue and no sellable product" that it alleged had "misled investors on both its demand and production capabilities."
"The Special Committee’s investigation concluded that the Hindenburg Report is, in significant respects, false and misleading," Lordstown said in a statement. "In particular, its challenges to the viability of Lordstown Motors’ technology and timeline to start of production are not accurate. The investigation did, however, identify issues regarding the accuracy of certain statements regarding the Company’s pre-orders."
Lordstown shares were marked 17.5% lower in pre-market trading Monday to indicate an opening bell price of $9.41 each.
Lordstown told the Securities and Exchange Commission last week that it didn't have enough cash on hand to build vehicles at scale and sell them, and that "these conditions raise substantial doubt regarding our ability to continue as a going concern."
Last month, Lordstown said 2021 production of its flagship tuck would be around half of its previous forecasts thanks in part to supply-chain issues, rising costs and a global shortage of semiconductor components, although it still hopes for a full September launch.