RIDE Stock: The Lordstown Motors News That Has Shares Revving Up Today

Lordstown Motors (NASDAQ:RIDE) stock is charging higher on Monday thanks to news of a $400 million investment.

A magnifying glass zooms in on the website for Lordstown Motors (RIDE).

Source: Postmodern Studio / Shutterstock.com

The investment in RIDE stock comes from YA II PN, which is a hedge fund managed by Yorkville Advisors Global. This allows the fund to purchase up to $400 million in shares at Lordstown Motors’ discretion from time to time.

The agreement between the two allows for the sale of shares over a 36-month period. YA can’t force the sale of shares but must buy shares at RIDE’s discretion. There’s no upper limit on the price per share that the hedge fund is required to buy.

Lordstown Motors also points out that it will not use this agreement to sell YA more than 35,144,690 shares of RIDE stock. That would exceed a 19.9% o fall outstanding shares. However, it can do so if certain conditions are met, such as getting shareholder approval to do so. It also can’t sell the shares if it would give YA a greater than 4.99% stake in the company.

It’s worth pointing out that the investment in Lordstown Motors comes after news last week that the company is under investigation by the Justice Department. This is in connection to its pre-order numbers for its upcoming electric vehicle (EV), as well as its merger with special purpose acquisition company (SPAC) DiamondPeak Holdings.

RIDE stock was up 1.7% as of Monday morning.

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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.

Article printed from InvestorPlace Media, https://investorplace.com/2021/07/ride-stock-the-lordstown-motors-news-that-has-shares-revving-up-today/.

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