UPDATED | Lordstown Motors now facing class-action lawsuit as stock slips another 14 percent
Justin Dennis, 18 March 2021
“I don’t think anyone thought that we had actual orders, right? That’s just not the nature of this business,” Lordstown Motors CEO Steve Burns said during an interview this morning on CNBC’s Squawk Box.
LORDSTOWN — Lordstown Motors Corp. is now facing a class action lawsuit from investors alleging executives delivered misleading statements about the company and committed securities violations.
Attorney Drew Legando of Cleveland law firm Merriman, Legando, Williams and Klang LLC filed the suit Monday in Ohio’s Northern District federal court on behalf of Lordstown Motors shareholder Matthew Rico.
Rico purchased 24 shares of Lordstown Motors (NASDAQ: RIDE) between Feb. 18 and March 5, paying in total about $540, according to a shareholder certification filed alongside the complaint. The stock has lost nearly half its value since Rico’s first purchase, which he made just a week after the stock had reached a nearly five-month peak.
At a 47 percent loss, Rico’s shares lost about $250 in value, more than half of which was lost after the short-seller firm Hindenburg Research published a damaging report on the state of the company and accused executives of misleading investors.
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VIDEO | After Hindenburg Research report, Lordstown Motors set to face investors today
Justin Dennis, 17 March 2021
Lordstown Motors has vowed to refute last week’s scathing short-seller report, which called demand for its Endurance all-electric pickup truck a “mirage” and claimed the company has been misleading investors.
LORDSTOWN — Lordstown Motors Corp. executives are expected to address the company’s investors during their end-of-year financial report this afternoon.
The report comes days after Hindenburg Research, a short-selling stock market research firm, delivered a damaging deep-dive into the Voltage Valley leader, claiming that its investors are being misled; that its all-electric pickup truck the Endurance is actually years away from production, despite executives’ September 2021 target; and that its book of about 100,000 non-binding pre-orders for the vehicle “are largely fictitious and used as a prop to raise capital and confer legitimacy.”
Lordstown Motors on Monday vowed to refute the report “in due time,” and a spokesperson last week promised a “thorough” statement. CEO Steve Burns, addressing reporters during a Monday tour of the plant where dozens of test vehicles are currently being built, reassured the Endurance is on-track.
“Whatever anybody thinks of us in the world, the main thing is we are going to be the first electric pickup truck in the United States, full-size, and that starts in September,” Burns said, as reported by The Business Journal.
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M. Michele Burns has been the Director of Goldman Sachs since 2011. She serves on many Goldman Sachs Committees including: Compensation (Chair), Governance, and Risk. Prior to Goldman Sachs, she was the CEO of Mercer LLC. She also served as Chief Executive Officer, Retirement Policy Center, Chief Financial Officer, MMC, Chief Financial Officer, Chief Restructuring Officer and Executive Vice President, Mirant Corporation, an energy, Executive Vice President and Chief Financial Officer, Delta Air Lines, Inc., and Senior Partner and Leader, Southern Regional Federal Tax Practice, Arthur Andersen LLP. She graduated from University of Georgia.
SEC Proposes Teeth for Short-Selling Rules
Judith A. Burns
The Wall Street Journal, 5 March 2008
Securities regulators voted 3-0 to propose a rule intended to crack down on lingering abuses involving so-called naked short sales and failures to deliver shares that have been used in such sales.
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