LORDSTOWN, Ohio (WKBN) – Lordstown Motors is once again making headlines, and the news is not good.
Now, several top executives are accused of selling off chunks of stock in the electric truck startup ahead of reporting financial results, according to Market Watch.
According to regulatory filings, five top executives sold more than $8 million in stock over three days in early February, according to the filings. Of the five, the company’s President and former Chief Financial officer was included.
In mid March, the company reported its first ever year-end results, which included losses that were more than double analysts expectations.
Among the executives who sold the stock, according to the Wall Street Journal, were Chuan John Vo, who heads the propulsion division; Rich Schmidt, a former Tesla Executive and and now Lordstown Motors President and Julio Rodriguez, who resigned last week as chief financial officer.
While that sale is not illegal, the move raises questions about the company’s internal controls, especially in light of its recent troubles, according to Market Watch.
What they’re not allowed to do is buy and sell stock based on insider information. None have been accused of that.
Company officials issued a statement Monday about the report:
“…as described in various Form 4 filings in the months following the DiamondPeak transaction, certain Lordstown Motors directors and executives have sold or transferred shares in the Company. Each of those transactions were made for reasons unrelated to the performance of the company or viability of the Endurance, and each such director and executive retained substantial Lordstown Motors equity holdings in the form of shares and options following the sales and transfers described in the Company’s public filings.”Lordstown Motors
Lordstown Motors, trading under the name RIDE, went public in October.
This is the week Lordstown Motors is allowing people inside the plant to see the progress that’s being made toward production of the all-electric Endurance pickup. Not only are investors being allowed inside but so are members of the media.
The company has yet to begin production on its first model, the Endurance all-electric pickup truck.
Lordstown Motors has gone through a tumultuous couple of months. CEO Steve Burns and Chief Financial Officer Julio Rodriguez stepped down after an SEC filing raised concerns that the company had enough money to begin production.
Then, company officials had to walk back comments made by President Rich Schmidt that the automaker had enough “binding” orders to get them through the first two years of production.