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BusinessLordstown Motors Invites Investors and Analysts to Its Factory

Lordstown Motors Invites Investors and Analysts to Its Factory

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Its fortunes took a turn this year when a small investment firm, Hindenburg Research, issued a report noting that almost none of the pre-orders were firm commitments to buy trucks, and some had come from small companies not currently operating truck fleets.

The company has promised to start production of the Endurance in September, but it has run into development difficulties. A prototype caught fire and burned up in a Detroit suburb in February, and another that was entered in a 280-mile off-road race in Baja California dropped out of the event after just 40 miles.

Then Lordstown’s board acknowledged some of the company’s statements about pre-orders were inaccurate, and the company filed a statement with securities regulators that it did not have enough money to start production and that it might not survive. That was followed by the resignations of its founder and chief executive, Steve Burns, and its chief financial officer, Julio Rodriguez.

Last week, Lordstown’s new president, Rich Schmidt, presented a more upbeat outlook, saying the company had enough money to last until May 2022 and that many of its pre-orders were binding agreements. Two days later, Lordstown filed another statement with the Securities and Exchange Commission saying, in effect, that Mr. Schmidt had erred and that it did not have binding orders for the truck.

In February, shortly before the Hindenburg report, a handful of executives sold about $8 million worth of stock. A few months earlier, insiders had sold $3 million worth of shares.

After a special committee of Lordstown’s board reviewed the stock sales, the company said in a statement that they “were made for reasons unrelated to the performance of the company or viability of the Endurance.”

The Wall Street Journal on Monday raised questions about the timing of the stock trades, in particular Mr. Schmidt’s sale of about $4.6 million worth of shares in early February. The Journal said Mr. Schmidt had used some of the proceeds to finance a Tennessee farm offering deer and turkey hunting, beef cattle and blueberries.



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