Research company alleges Lordstown Motors faked orders, sending stocks falling

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CEO Steve Burns responded to the "Wall Street Journal" on Friday saying, "...the report contained half-truths and lies"

LORDSTOWN, Ohio (WKBN) – A company that refers to itself as a “forensic financial research specialist” is betting against Lordstown Motors’ stock.

The company released a report Friday calling the company’s orders “fake,” all of which led the RIDE stock to fall over 16%.

In its report, short-seller Hindenburg Research says the company has “misled investors,” focusing on the company’s demand and production capabilities. It states its review shows the “…company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy.”

But Hindenburg has a financial interest in releasing the report, according to Brian Laraway, a partner at Bury Financial Group.

“They put out research and short-sellers, generally, they want to see a lot of price movement. Specifically, they make money when the price of something goes down,” he said.

Lordstown Motors has claimed it has 100,000 pre-orders for the Endurance electric pick-up truck. Those are non-binding.

It hopes to have the truck ready for production later this year.

The Hindenburg report also called CEO Steve Burns a con man. The report alleges that many of the customers cited by Lordstown Motors do not operate fleets nor do many have the means to make the stated purchases.

Burns responded to the “Wall Street Journal” on Friday saying, “…the report contained half-truths and lies.”

Lordstown Motors hasn’t released any additional information yet, giving people more time to consider the report and their investment.

Laraway said investors should do their due diligence when considering the next moves and consider the current volatility in the electric vehicle industry.

“It’s a pretty long runway here, so you need to think, are you going to be a trader — meaning moving in and out of a position — or are you an investor? And that’s a critical thing for someone to know going into pressing that buy button,” he said.

Friday evening, Ryan Hallett, PR for Lordstown Motors, said, “We will be sharing a full and thorough statement in the coming days, and when we do we will absolutely be refuting the Hindenburg Research report.”

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