Lordstown Recants Claim It Has Binding Orders; Shares Tumble
(Bloomberg) -- Lordstown Motors Corp., the under-fire electric vehicle startup, said in a regulatory filing that orders for its Endurance pickup are non-binding, countering a claim made at a media event earlier this week and sending shares tumbling.
The company’s stock fell as much as 7% on Thursday after the company clarified statements by company President Rich Schmidt on June 15 that Lordstown had binding orders that would sell out capacity of 20,000 trucks through May of next year. The stock rose more than 11% that day based on his statement.
“Although these vehicle purchase agreements provide us with a significant indicator of demand for the Endurance, these agreements do not represent binding purchase orders or other firm purchase commitments,” the company said in a filing it released to “clarify recent remarks by company executives.”
Demand for its trucks has been central to the company’s troubles. Company founder and former Chief Executive Officer Steve Burns was removed from the job after the board determined that he had overstated orders for the truck with claims of 100,000 pre-orders. The board’s investigation followed a short seller’s report accusing Burns of overhyping real interest in the Endurance.
At the Automotive Press Association event, Schmidt said the company had firm commitments from buyers for up to 20,000 trucks. He added that the company has cash to get the truck into production and stay flush through May of next year, but said Lordstown is trying to raise more. The startup issued a ‘going concern’ warning this month saying it may not last 12 months on current cash reserves.
“Currently we have enough orders for production for 2021 and 2022. Those are firm orders we have for those two years,” Schmidt said at the online event. “They are basically binding orders. They are committed here in the last two weeks, re-confirmed orders. They are pretty solid.”
The truck is scheduled to go into production in September.
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