RIDE Stock: Why Lordstown Motors Shares Are Accelerating Today

Shares of Lordstown Motors (NASDAQ:RIDE) seem to be on the mend in Monday’s pre-market trading after being hammered on Friday in the wake of a short-selling firm’s harsh assessment. RIDE stock took a hit for 16.5% of its value on March 13.

A 3D rendering of a green truck in front of a blue sky.

Source: Shutterstock

The EV truck firm said that it remains on track to start production of its Lordstown Endurance all-electric pickup truck in September 2021. It promised investors more details on its inaugural earnings call on March 17.

It is reacting to being described as a “mirage” characterized by “fake orders, undisclosed production hurdles, and a prototype inferno” by Hindenburg Research. With a short position in RIDE stock, Hindenburg questioned much about the expectations that investors have for the EV truck firm.

“Our research has revealed that Lordstown’s order book consists of fake or entirely non-binding orders, from customers that generally do not even have fleets of vehicles,” the report said. “According to former employees and business partners, CEO Steve Burns sought to book orders, regardless of quality, purely as a tool to raise capital and confer legitimacy. In addition, we show how, in desperation to claim there was demand for the proposed vehicle, he paid for customers to book valueless, non-binding pre-orders.”

Wild Ride for RIDE Stock

It’s been a wild ride for EV stocks, and Lordstown in particular. President Joe Biden recently issued an executive order calling for an all-electric federal fleet. Potentially gaining from that announcement, Lordstown has begun work on an electric van. Local Ohio politicians have taken to calling the Mahoning Valley — where the company’s operations are based — the “Voltage Valley.” On top of that, the company is pursuing a $200 million U.S. Energy Department loan to retool its factory.

With the share price down 13% year to date even before Friday’s short-seller shellacking, the RIDE stock price chart looks like a roller-coast blueprint. Since its SPAC IPO merger with DiamondPeak Holdings was finalized in October, the share price hit a high of $31.80 as well as falling to a $9.50 low.

Lordstown is just the latest EV stock that Hindenburg has seen fit to sell short. In November, it alleged that Kandi Technologies (NASDAQ:KNDI) was fabricating sales. Charges that Nikola (NASDAQ:NKLA) parlayed “an ocean of lies” led to a probe by the Securities and Exchange Commission (SEC). That report knocked NKLA stock from a near $46 per share level to $19; it has since traded in a narrow range, anchored by the current $17 price.

On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.

Article printed from InvestorPlace Media, https://investorplace.com/2021/03/ride-stock-why-lordstown-motors-shares-are-accelerating-today/.

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