LORDSTOWN, Ohio (WKBN) – Financial reports Tuesday point to more trouble for Lordstown Motors Corporation.
The last positive news that came out of Lordstown Motors was in April when video was released of the Endurance pickup beta model. A month before that, during a tour for the Ohio Secretary of State, Lordstown Motors CEO Steve Burns addressed people who thought there’d never be a truck.
“I quoted Taylor Swift to somebody the other day. Haters are going to hate, hate hate. You gotta shake it off,” Burns said during an interview at that time.
Now, shares for RIDE (Lordstown Motors Corp.) dropped 20 percent Tuesday after the company warned investors that it doesn’t have sufficient cash to start commercial production, calling it a “going concern.”
Comments in the filing include the following:
The opinion of our independent registered public accountants on our audited financial statements as of and for the year ended December 31, 2020, contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to complete the development of our electric vehicles, obtain regulatory approval, begin commercial scale production and launch the sale of such vehicles. The Company believes that our current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles. These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of the consolidated financial statements included in this report. If we are not able to continue as a going concern, or if there is continued doubt about our ability to do so, the value of your investment would be materially and adversely affected.Lordstown Motors SEC filing
Burns was much more optimistic in October 2020, before COVID’s winter surge.
“We have the finances to get all the way to market. So, I think that’s about, for a startup electric car company, that’s as stable as you can get,” Burns said.
Seven months later, with COVID winding down, Burns was not as optimistic. During an investors’ conference call he said production this year would at best be 50% of the original expectations.
“Our ability to produce enough vehicles to satisfy our expected market demand depends on many variables such as suppliers and passing regulatory hurdles and also our access to capital,” Burns said.
As of this report, Lordstown Motors stock is currently down to $10.49 a share, down $3.31 from where it opened Tuesday morning. At one point, it was up to $15 a share. Its 52-week high was $31.80 on February 11.