Lordstown Motors reported Monday that CEO Steve Burns and CFO Julio Rodriguez have resigned. The announcement came days after the electric truck maker warned that it experienced “significant question” about its capability to continue as a going worry in the upcoming year.
Shares of Lordstown, which went public by way of a exclusive goal acquisition company in Oct, slid 18.8% Monday to $9.26.
Lordstown said its guide impartial director, Angela Strand, has been appointed executive chairwoman and would oversee the firm’s changeover till a long-lasting CEO is determined. The corporation named Becky Roof as interim CFO, productive right away.
The resignations come amid an inside investigation of the company’s functions into claims by short-seller Hindenburg Exploration that it misled investors. The Securities and Exchange Fee has opened an inquiry looking at Hindenburg’s promises as effectively as the company’s merger with SPAC DiamondPeak Holdings.
Hindenburg accused Lordstown in March of utilizing “phony” orders to raise cash for its Stamina electric pickup. The shorter seller said the pickup was decades away from creation, but Lordstown has taken care of it can be on monitor to begin creating the auto in September.
Morgan Stanley analyst Adam Jonas mentioned the administration adjust is “an important 1st phase for the organization to transfer ahead,” including securing important new capital.
“We felt it was untenable for the business to safe required new capital with a management workforce widely seen as potentially not major the firm into the future era of its growth,” he mentioned Monday in an trader note.
The resignations are the most up-to-date fallout at Ohio-based Lordstown. Shares of the aspiring automaker are down 54% this calendar year. Its current market cap is about $2 billion.
In May possibly, the company slashed its creation guidance for the calendar year and stated it will have to have to increase more capital.
Lordstown is among a expanding group of electric powered car begin-ups heading community through deals with SPACs, which have turn into a popular way of increasing revenue on Wall Road because they have a extra streamlined regulatory method than regular initial public offerings.
The business is scheduled to host media, buyers, analysts and other folks subsequent week at its plant, a former Common Motors facility in Ohio. Strand claimed individuals strategies are nonetheless in area.
“We keep on being dedicated to delivering on our creation and commercialization objectives, holding ourselves to the optimum standards of procedure and functionality and developing benefit for shareholders,” she claimed in a assertion. “Along with the administration team, I will continue on to get the job done closely with them and the Board to execute on Lordstown’s eyesight for the foreseeable future of electrified transportation.”
Burns is the latest superior-profile govt of a SPAC-backed automotive enterprise to resign. Nikola Chairman Trevor Milton, who was CEO in advance of the company’s June 2020 IPO, resigned very last calendar year amid SEC inquires following a independent Hindenburg Investigation report that accused Milton and the organization of deceptive traders.
More a short while ago, Canoo CEO Ulrich Kranz, a previous BMW executive, resigned from the EV start off-up in April. He was not long ago hired by Apple.
– CNBC’s Michael Bloom and Reuters contributed to this report.