Today, embattled upstart electric vehicle (EV) company Lordstown Motors (NASDAQ:RIDE) is finally seeing some love. Shares of RIDE stock are more than 12% higher on a risk-on day for equities broadly.
Indeed, it appears investors are taking a breather today from making bearish bets on various hypergrowth stocks. Once touted as one of the leaders in the EV pickup truck space, a number of drivers have taken this stock lower in recent months.
Bearish investors have been emboldened by short-seller attacks on RIDE stock. High-profile short-seller Hindeburg Research published a scathing report in March highlighting various issues with preorder data, along with undisclosed production hurdles. The Securities and Exchange Commission (SEC) followed up on these allegations, launching an investigation into Lordstown. Unsurprisingly, many investors have chosen to steer clear of this stock until the dust settles.
Additionally, rival Ford (NYSE:F) has recently unveiled its F-150 Lightning model. This electric version of the popular F-150 is expected to garner significant market share. Lordstown should have its pickup to market first. However, given Ford’s size and scale, investors aren’t so sure about that schedule any more. Accordingly, intense attention is being placed on Lordstown as the company races to get its pickup trucks and other EV models to market.
That said, let’s dive into why Lordstown is seeing impressive buying activity today.
Retail Investor Interest Driving RIDE Stock Higher
Among the key catalysts taking RIDE stock on a nice (dare we say it) ride today is some support from the r/WallStreetBets crowd.
A number of retail investors have pointed out that RIDE stock has seen a significant uptick in chatter. Currently, this stock is in the top 20 most discussed stocks on r/WallStreetBets. As an influential forum for retail traders and speculators, it’s possible Lordstown could be in the running as a short-squeeze candidate.
I mean, this thesis seems to hold water. Lordstown has become one of the most heavily shorted stocks in recent months. This is due, at least in part, to significant high-profile pressure on this company from Hindenburg and others. Given the company’s high short interest and low price per share, RIDE stock is well-positioned as a short-squeeze candidate.
Additionally, a key report last week noted that Lordstown is looking to start production of its EV pickup truck next month. For those concerned about the market share race that’s heating up, this is extremely good news.
Lordstown is projecting vehicle production at some point in September, with “vehicle validation and regulatory approvals in December and January.” This would put Lordstown on track to meet its previous production targets. This would also potentially discount some of the short-seller rhetoric weighing down this stock.
On the date of publication, Chris MacDonald 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.
