Hindenburg Hits Lordstown Motors, Alleging Fraud In Enterprise Functions
Hindenburg Analysis has issued a blistering short report on Lordstown Motors Corporation (NASDAQ: Ride), accusing the organization of fraud and heading brief on the Ohio-dependent electric truck maker.
What Took place: In a report titled “The Lordstown Motors “Mirage”: Phony Orders, Undisclosed Output Hurdles, And A Prototype Inferno,” Hindenburg stated an investigation into the enterprise discovered a important disconnect concerning how it’s selling itself and the authentic earth.
Hindenburg, whose website was not performing this early morning, also published an comprehensive thread on Twitter highlighting its findings.
“Lordstown is an EV SPAC with no income and no sellable solution, which we consider has grossly misled buyers on the two its demand and generation abilities,” Hindenburg tweeted.
“$Experience has constantly pointed to its book of 100,000 pre-orders as evidence of need for its proposed EV truck. Our in depth exploration reveals that the company’s orders surface mainly fictitious and utilised as a prop to raise money and confer legitimacy.”
This most recent limited report will come months just after Hindenburg hit Nikola (NASDAQ: NKLA), yet another electric powered auto startup.
Why It is Essential: Hindenburg cited a number of examples of what it claimed to be evidence of Lordstown’s chicanery:
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The alleged $735 million deal for 14,000 vehicles with E Squared Electricity, which Hindenburg said “is primarily based out of a small residential condominium in Texas that won’t operate a car or truck fleet”
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A 1,000-truck, $52.5 million purchase arrives from a two-human being startup whose owner stated there was no car order
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A 50 percent-dozen non-binding orders from buyers who do not run fleets.
Furthermore, Hindenburg known as out Lordstown to attribute the CEO of Grid-X in its marketing materials – the chief government instructed Hindenburg he hardly ever listened to of Lordstown.
The Hindenburg investigate also cited previous Lordstown staff members who explained company founder and CEO Steve Burns as a “con man” or a “PT Barnum” figure.
“One senior employee told us that, while doing the job with Steve, they saw more questionable & unethical small business procedures than they had noticed in their vocation,” Hindenburg claimed.
As for Lordstown’s automobiles, Hindenburg cited a previous employee who said the corporation was three to 4 many years away from production owing to “drastic” design and style modifications. The 1st street highway test for a Lordstown motor vehicle occurred in January, with the car or truck bursting into flames 10 minutes into the travel.
What’s Upcoming: Hindenburg observed that Lordstown “only went public in October 2020, but in that transient time, executives and administrators have unloaded ~$28 million in stock. We assume it bodes inadequately when executives unload inventory in a business with no genuine solution that statements to be on the cusp of mass-creation.
“$RIDE’s tale has introduced hope to investors and a tricky-hit community community, but we you should not imagine the business has been clear … We are brief shares of $Ride.”
Benzinga arrived at out to Lordstown for remark, but as of this writing has received no reaction.
Lordstown’s stock was down 20% to $14.10 at publication time.
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