Investors are reacting to negative news from Lordstown Motors (NASDAQ:RIDE) this morning, driving RIDE stock down more than 13%.
In a double-whammy, management gutted its production guidance for the year and said it will need to raise additional capital as it “encountered some challenges” to its plan to begin producing its Endurance electric pickup truck in late September.
Speaking to investors on a Monday conference call, CEO Steve Burns said that absent any additional funding, the EV maker will likely produce fewer than half of the original 2,200 vehicles he earlier guided.
How many fewer? Production of 1,000 trucks now seems about what to expect. The firm had once optimistically said it planned 20,000 electric trucks annually, starting in the second half of 2021, at the former GM Assembly Plant in Lordstown, Ohio.
The news could not be worse for RIDE investors. The post-SPAC stock has been beaten up recently along with other newly public entities. Plus, Lordstown has been entangled in a rather messy ordeal with short sellers. Lordstown confirmed it is cooperating with the U.S. Securities and Exchange Commission as it investigates short-seller Hindenburg Research’s claims that management misled investors.
RIDE Stock Fades in Shadow of Ford’s F-150 EV
Lordstown yesterday reported a $125 million net loss on zero revenue, along with capital expenditures of $53 million in the first quarter. Projected expenses will be between $335 million and $350 million, up from between $220 million and $235 million. It also lowered its forecast for year-end liquidity from at least $200 million to between $50 million and $75 million in cash and cash equivalents.
Ford’s initial data suggest some pretty intense demand for its F-150 Lightning option. Additionally, if Ford is able to capture the lion’s share of the pickup market, companies like Lordstown may have a harder time breaking through with the growth it has promised investors, even if it can attract funding and revisit its earlier production goals.
“Reality is a cruel mistress for aspirational Lordstown Motors,” read the headline on InvestorPlace contributor Josh Enomoto’s analysis of RIDE stock on May 20. Perhaps presciently, he assessed all that then ailed the EV truck maker and advised “it’s not looking good for Lordstown and the situation will probably worsen.” Looks like he was right.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News and as a buyside equity research editor.