Home Business Electrical truck maker Lordstown warns of going concern danger; shares tank

Electrical truck maker Lordstown warns of going concern danger; shares tank

The Lordstown Motors manufacturing facility is the place GM as soon as operated, in Lordstown, Ohio, on October 16, 2020.

Megan Jelinger | AFP | Getty Photos

U.S. electrical truck maker Lordstown Motors mentioned on Tuesday there was “substantial doubt” about its potential to proceed as a going concern, sending its shares down 16%.

“The corporate believes that its present stage of money and money equivalents aren’t adequate to fund industrial scale manufacturing and the launch of sale of such automobiles,” Lordstown mentioned in a quarterly filing with the U.S. Securities and Alternate Fee.

“These circumstances increase substantial doubt concerning our potential to proceed as a going concern for a interval of at the least one yr from the date of issuance of those unaudited condensed consolidated monetary statements,” the corporate added.

A Lordstown spokesman couldn’t instantly be reached for extra remark.

Lordstown, which went public final yr by a reverse merger with a special-purpose acquisition firm (SPAC), has struggled with the launch of its Endurance pickup truck. The truck is being constructed at a former General Motors plant in northeast Ohio.

Final month, Lordstown mentioned its Endurance manufacturing this yr can be half its prior expectations and it wanted extra capital to execute its plans.

In March, Lordstown’s shares slumped after Hindenburg Analysis disclosed it had taken a brief place on the inventory, saying the corporate had misled customers and buyers.

Quick sellers wager the value of a inventory will fall by borrowing shares within the hope of shopping for them again at a less expensive worth and pocketing the distinction.

GM, which is a minority shareholder in Lordstown, declined to touch upon the Lordstown submitting.

Lordstown reported a internet lack of $125.2 million for the quarter ended March 31, and had money and money equivalents of about $587 million and an collected deficit of $259.7 million as of March 31.

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