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.
Lordstown Motors on Wednesday morning released a promotional video of the beta vehicles being built:
When the Hindenburg report was published Friday, the firm disclosed it maintained a short position in Lordstown Motors, meaning it had borrowed then sold shares of the company which it later expected to buy back for cheaper, after the stock lost value.
That Friday, nearly 11 million shares of RIDE were newly shorted, about 60 percent of the 19.6 million-share volume, according to Naked Short Report. Over the previous month, the stock’s short volume was, at most, 2.1 million shares. The short volume fell back down to about 3.4 million on Monday.
Lordstown Motors stock (NASDAQ: RIDE) lost 17 percent on Friday after the report was released, but recovered about half that by the time it closed on Monday at $16.22.
RIDE closed at $15.22 Tuesday, losing more than 6 percent on the day and remained stable in after-hours trading.
The Hindenburg report called demand for the all-electric Endurance a “mirage,” claiming the company’s non-binding pre-orders don’t represent potential sales.
One of Lordstown Motors’ larger pre-order clients, which signed a letter of intent to purchase 14,000 vehicles, was E Squared Energy Advisors of Texas.
The company late last year started working as an intermediary between vehicle suppliers like Lordstown Motors and clients that may be in the market for a vehicle like the Endurance, which is targeted toward fleet operators, said CEO Tim Grosse.
Though Hindenburg’s report characterized E Squared as an immaterial shell company that doesn’t own or operate its own fleet — raising questions about their order’s legitimacy — Grosse said Hindenburg’s reporter distorted the facts about his company.
Grosse claimed the reporter even withheld his true motives for interviewing him, claiming he was reporting on vehicle electrification in the European Union.
“I think it should be illegal for people to be able to take a short position then make all kinds of accusations about a company and profit from it,” Grosse told Mahoning Matters Tuesday.
Sam Spofforth, executive director of Clean Fuels Ohio, told Hindenburg its pre-order of 500 Endurance trucks was for “promotional” purposes.
But the nonprofit had a similar interaction with a Hindenburg reporter. Had they known the reporter’s intent was to release a short-seller’s report, Clean Fuels Ohio wouldn’t have agreed to speak with them, said spokesperson Tyler Fehrman.
“They misrepresented who they were and what their intentions were,” he said.
The largely member-driven nonprofit works with fleet buyers to educate them on the need for cleaner transportation and helps them identify new solutions like the Endurance, Fehrman said. To that end, Clean Fuels has been supporting Lordstown Motors, he said.
“We enthusiastically support all of our member organizations. When they have something that we believe really moves the needle in the clean transportation space, we are more than happy to advocate on behalf of it,” Fehrman said.
Despite the noise, securities allegations against Lordstown Motors and its affiliate Workhorse Group have drawn the attention of high-powered attorneys.
Rosen Law Firm of New York City on Friday announced it’s “investigating potential securities claims” on behalf of Lordstown Motors investors, based on Hindenburg’s allegations that Lordstown Motors “may have issued materially misleading business information to the public.”
That’s the same firm that filed a class-action lawsuit against Cincinnati-based Workhorse Group after it was rejected for a $6.3-billion U.S. Postal Service contract to develop its new line of fleet vehicles.
The suit claims Workhorse executives made misleading comments to media outlets in stock market reports and failed to disclose that the company had no assurance it would be awarded the contract and that electrifying the postal service’s fleet would be “impractical and astronomically expensive.”
Burns was a co-founder of Workhorse Group, and the company maintains a 10-percent equity stake in Lordstown Motors.