Lordstown Motors Corp (RIDE) stock recently traded at $12.18 which is a 3.44% upward movement, at the time of writing. The stock previously closed at $11.77.
Today’s pattern of RIDE stock movement comes along with the news of a law firm announcing class action complaints filed against the Electric Vehicle Manufacturer.
The operational background of Lordstown Motors Corp
Lordstown Motors Corp. is a vehicle manufacturing company. It specifically manufactures electric-vehicles and light duty fleet vehicles. Lordstown has acquired a manufacturing plant in Ohio that is consisting of a 785 acre Assembly plant. The CEO Steve Burn has announced to build the Lordstown Endurance which is an all-electric pickup truck and it will be established. Endurance will be manufactured in the Ohio manufacturing plant. Endurance will be first of its kind electric pickup truck designed for the fleet market.
Lordstown Motors unmoved by another development of lawsuit?
The Klein Law Firm has announced today that on behalf of shareholders of RIDE stock it has filed a Class-Action Lawsuit. The Class period starts from August 2020 to March 17, 2021. The Lead plaintiff deadline is for 17th May, 2021. Even SEC has started to look into this investigation.
However, this has not affected the fundamentals of RIDE stock; it is months away from delivering its first vehicles but even now the company’s market capitalization is crossing over $2 billion. The commercialization plan of Endurance which has a price tag of $50,000 is going to be in September of this year.
When and how did the accusation of Lordstown Motors Corp begin?
The RIDE stock news has not been good lately and neither is the consecutive streak of losses in the market by the auto-manufacturing corporation.
This all started on 12th march when the investigative research firm known as Hindenburg Research set its sight on the claim of CEO of Lordstown Steve Burns. He claimed on an interview on 23rd February that his company has presold 100,000 electric pickup trucks. Hindenburg states that this claim of orders and order book consists of a series of false or non-binding orders.
What is Hindenburg’s report about?
In the report created by Hindenburg, it has stated that the electric-vehicle manufacturer has misled its investors by lying about its demand and production capability. The Research firm further stated that the company has no solid revenue and no sellable product.
Hindenburg had then shorted Lordstown Motors Corp. (RIDE) which led to a downward plunge in the stock price. This RIDE stock news caused other investigative law firms and research firms to pick on the bones on the company, as is the influence of the Hindenburg’s market reputation.
Since 12th March leading to 18th March, RIDE stock has been under scrutiny of several law firms including The Schall firm, Nationally Ranked Shareholder Rights Firm and Hagens Berman- National Trial Attorneys.
Steve Burns has defended against the accusation saying that Lordstown won’t directly be addressing the accusations made by the Hindenburg and that the company is cooperating with the regulators to further look into this matter.
High risks of fraud gives investors mixed views about RIDE stock
Overall the RIDE stock is performing well amidst the accusation and investigation. Lordstown had reported $630 million cash at hand in the end of the Q4 2020 report. However when looking at the company’s future operation performance, you should keep in mind that Lordstown Motors has no prior experience in the manufacturing of electric vehicles at scale. It has yet to reach a full-capacity limit for its Ohio plant, which is predicted to only happen after second quarter of 2020. Furthermore, there is always the risk of the investigation of SEC finding out the potential bad news for the Company that may not bode well for the Investors either.