Hindenburg Research, a short-seller firm whose report on Nikola Motor is undergoing SEC investigation and the Resignation of its founder, Is targeting another electric vehicle company. This time it is Ohio electric automaker Lordstown Motors, which went public after its merger with special-purpose acquisition company Diamondpeck Holdings Corp with a market value of $ 1.6 billion.
Hindenburg said in a report on Friday that it had taken a smaller position on Lordstown Motors, leading to a 21% drop in shares. The shares have fallen slightly and are now down about 15% from the previous day’s trade. Hindenburg’s short position is based on a company that says “no revenue and no salable product, which we feel has misled investors on both its demand and production capabilities.”
in Report release On Friday, Hindenburg disputed that the company had booked 100,000 pre-orders for its electric pickup truck, a statue shared by Lordstown Motors in January. The short seller states that “extensive research suggests that company orders appear to be largely hypothetical and are used as a prop to raise capital and provide legitimacy.” The firm goes ahead and alleges that Lordstown founder and CEO Steve Burns paid consultants to pre-order every truck in early 2016 while he was heading the workhorse.
The report also provides photos and 911 calls of an incident in January when a Lordstown prototype vehicle burst into flames during a test drive.
Lordstown Motors could not be reached for comment. TechCrunch will update the article if the company responds.
Lordstown has an interesting history for the company which is less than two years old. Lordstown Motors Burns’ second company, the Workhorse Group, is a battery-electric transportation technology company that is also publicly traded. Workhorse has a 10% stake in Lordstown Motors.
Workhorse is a small company founded in 1998 and has struggled financially at various points in its lifetime. Recently, Workhorse lost a bid to the US Postal Service to become a supplier of electric vehicles, causing shares to fall nearly 15% in the days following the news. Workhorse shares are now hovering around $ 16.58, down 60% from their record price of $ 42.96 as of February 4.
Lordstown Motors acquired a 6.2 million sq ft factory from GM in 2019. The company said it plans to produce 20,000 electric commercial trucks annually in 2021, which will start in 2021 at the former GM assembly plant in Lordstown, Ohio.
Lordstown revealed its Endurance Electric Pick in a Show off and political leaning ceremony In June 2020. At the time, the company did not provide details on the interior, performance or battery of its planned electric pickup truck. The entire second half of the event was taken 90 degrees from the truck and its distinguished guest, former Vice President Mike Pence, who spoke for 25 minutes about former President Trump’s policies on jobs and manufacturing, China and COVID- , Stay focused on. 19 reaction.
Despite the lack of those details, Burns told the crowd in June that he had received 20,000 pre-orders. This means that the entire first year of production will be discontinued if every customer who pre-ordered through the truck and bought the vehicle. At the time, many potential customers sent letters of intent, Lordstown Motors said, including Autoflexfate, Clean Fuels Ohio, Duke Energy, First Ignegie, GridX, Holman Enterprises and ARI, Summit Petroleum, Turner Mining Group and Velor Holdings. As well as several Ohio municipalities.
Burns later stated that pre-orders had reached 100,000. Hindenburg disputes those claims.
From the Hindenburg Report:
Our research has shown that Lordstown’s order book contains fake or completely non-binding orders from customers, which usually do not even have a fleet of vehicles. According to former employees and business partners, CEO Steve Burns sought to book orders as a tool to raise capital and provide legitimacy, regardless of quality. Furthermore, we show how, desperate to claim the demand for the proposed vehicle was, they paid customers to book valueless, non-binding pre-orders.
We detail conversations with Lordstown “customers” who were eager to explain that the letter of intent (“LOI”) with the company was “publicity”. Others assured us that they were “not committed to anything” and that the pre-order commitment size recorded by Lordstown was “completely impossible”. A CEO on the ‘main’ client told us that our outreach was earlier when he had heard of any arrangement with Lordstown.