Lordstown Motors (RIDE) - Get Lordstown Motors Corp. Class A Report dropped on Friday after short-selling investment firm Hindenburg put out a sharply critical report on the electric-vehicle maker and said it took a short position in the stock.
Shares of the Lordstown, Ohio, company recently traded at $14.19, down 20%.
The Hindenburg report says “Lordstown is an electric vehicle SPAC with no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities,” it said.
“The company has consistently pointed to its book of 100,000 pre-orders as proof of deep demand for its proposed EV truck.
"Our conversations with former employees, business partners and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy.”
As an example, the report says “Lordstown recently announced a 14,000-truck deal from E Squared Energy, supposedly representing $735 million in sales. E Squared is based out of a small residential apartment in Texas that doesn’t operate a vehicle fleet.”
Another assertion in the report: “One senior employee told us that while working with [the CEO] for a couple of years, they saw more questionable and unethical business practices than they had seen in their entire career.”
In addition, “former employees also shared that the company has completed none of its needed testing or validation,” the report said.
Hindenburg last year pushed down the stock of another electric-vehicle company, Nikola NKLA, with a damning report.
A spokesperson for Lordstown said in an emailed comment that “We will be sharing a full and thorough statement in the coming days, and when we do we will absolutely be refuting the Hindenburg Research report.”