Lordstown Motors (NASDAQ:RIDE) stock is taking a beating this morning after warning that it might not be around for much longer.
In a recent filing with the U.S. Securities and Exchange Commission (SEC), the company said that funding issues could result in it closing down its business within the span of a year.
Here’s a segment from that filing discussing the issue that’s hitting RIDE stock today.
“The Company believes that our current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles. These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these consolidated financial statements.”
Taking this into account, management at the electric vehicle (EV) is considering ways to keep the company going. The goal is to obtain enough funds so that commercial production of the Endurance EV pickup truck can begin.
The main plan is to seek out additional funding for Lordstown Motors. This could be possible via “issuance of equity, mezzanine or debt securities, through arrangements with strategic partners or through obtaining credit from government or financial institutions.” Lordstown Motors notes that it can’t guarantee it will obtain additional funding.
RIDE stock is seeing heavy trading on today’s news. As of this writing, more than 40 million shares of the stock have changed hands. For comparison, the company’s daily average trading volume is closer to 10.9 million shares.
RIDE stock was down 2.5% in pre-market trading Wednesday morning after experiencing a 16.3% fall yesterday. It’s also down 45% since the start of the year.
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On the date of publication, William White 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.