Lordstown Motor Corporation (RIDE) Misled Investors About its Endurance Orders and Production Capabilities
On August 1, 2020, Lordstown announced it had entered into a merger agreement with DiamondPeak Holdings Corp, a special purpose acquisition company, through which Lordstown would become a publicly traded company. In announcing the merger, Lordstown stated that demand for Endurance – a full-size electric pickup truck and the Company’s first production vehicle – was “proven with pre-orders covering first year of production.” In announcing that it had become publicly traded, on October 26, 2020, Lordstown re-affirmed it had received 40,000 pre-orders and confirmed “assets were already in place in order to successfully achieve [its] production milestones.” Throughout the class period, the Company continued to tout its ability to begin production of the Endurance in September 2021, and announced a consistent increase in pre-orders.
On March 12, 2021, Hindenburg Research revealed that the Company had “no revenue and no sellable product” and “misled investors on both demand and production capabilities.” The reported cited “fake pre-orders” that were “used as a prop to raise capital and confer legitimacy.” The report further detailed why the Endurance was three to four years away from production. On this news, Lordstown’s stock price fell $2.93 per share on March 12, to close at $14.78, a decline of approximately 17%. Then, on March 17, 2021, Lordstown announced its financial results for fourth quarter of 2020, reporting a net loss of $101 million. The Company also announced that the SEC had launched an investigation regarding matters described in the Hindenburg Report and that it had formed a special committee to conduct an internal inquiry. On this news, Lordstown stock price fell another $2.08 per share, to $13.01 on March 18, 2021, representing a 58% decline from the class period high.
If you purchased shares of Lordstown Motor Corporation (RIDE) between October 26, 2020 and March 17, 2021, you have until May 17, 2021, to ask the court to appoint you lead plaintiff for the class.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
