The two main executives of Lordstown Motors have resigned over an issue with the boot support for Ohio’s electric trucks.
CEO Steve Burns and CFO Julio Rodriguez have resigned, the company said on Monday.
The departure was announced the same day Lordstown responded to a bitter March report from top-selling company Hindenburg Research asking how many pre-orders it claimed to have received for a renowned endurance car.
Lordstown’s own research revealed that most of Hindenburg’s reports were unfounded, but one of the potential buyers who made a large number of pre-orders made these purchases. He admitted that he didn’t seem to have enough resources to do so. The company said on Monday that other pre-orders appeared unreliable because they were too vague or too weak.
The report sparked four potential class actions against Lordstown by investors claiming to have committed fraud.
Lordstown announced on Monday that he would appoint independent director Angela Strand as chair and oversee the organization’s transition until a permanent CEO is found. Strand is the Managing Director of the consulting firm StrandStrategy.
Becky Roof, who was Interim CFO of Eastman Kodak, Hudson Bay and Saks Fifth Avenue, has been appointed Interim CFO of Rosetown.
The company hired an executive search firm to find a new CEO and CFO.
The resignation in Rhodestown comes less than a year after Nicola, the founder of another electric car startup, resigned over a fraudulent allegation. Nikola’s resignation of Trevor Milton also occurred shortly after Hindenburg’s investigation. Nicola’s success is a “complex con” and is based on a “sea of ââlies” which includes a video showing a truck rolling down a hill. While driving on the highway, the word “hydrogen electricity” is engraved on the side of the vehicle, which is actually fueled by natural gas.
Last week Lordstown warned it might not be open in a year as it struggles to secure the funds to start full production. With a quarterly regulatory submission, the company began commercial production of a full-size electric pickup called Endurance at its former General Motors plant near Ohio for $ 587 million on hand as of March 31. He said that was not enough to do. Youngstown.
However, Lordstown was in trouble shortly after becoming a publicly traded company due to a merger with a specialist acquisition company last year. Public offerings through PSPCs are generally faster than traditional initial public offerings, which are typically processed by large financial institutions.
In January, a prototype of the Endurance pickup truck ignited 10 minutes after the first test drive in Michigan. After that, the company was unable to pay the $ 570,000 in property tax payable in early March.
The company’s shares have been on a strong downtrend since February, below the initial public offering price of around $ 10.
It can get worse.
According to FactSet, outgoing CEO Burns is the largest shareholder in the company with a 26.25% stake.
Remaining investors might not want to know what would happen if Burns started pulling stocks, according to Morgan Stanley’s Adam Jonas.
As Rhodestown’s affairs come under increasing scrutiny, its momentum has been demonstrated and partially protected from the time it was released by the PSPC.
PSPC can reduce the time it takes for a company to trade stocks on the stock exchange by up to 75% compared to the traditional initial public offering process. PSPC can also facilitate the involvement of prospects. For example, companies that take the PSPC route often feel more empowered to highlight the big growth forecasts they expect in the future. In traditional IPOs, the company has limited itself to highlighting past performance. This usually may not be a big selling point for young startups who can’t make big profits or profits.
Lordstown’s investors include General Motors, which acquired a 5% stake. Spokesman Jim Cain said on Monday that the company’s investment would remain unchanged. GM was apparently set to acquire a significant stake in Nicola last year, but walked away from the company after the founder’s resignation.
FILE- This June 25, 2020 file photo shows a Rosetown Motors Corporation endurance electric pickup truck in Lordstown, Ohio. Lordstown Motors CEO Steve Burns and CFO Julio RodrÃguez have resigned from the startup’s commercial electric vehicle maker. Less than a week after warning Rosetown may not open in a year as it seeks funds to start full production of electric pickup trucks. It is done. (AP Photo / Tony Dejak, file)
Lordstown Motors’ bad roads continue. CEO and CFO walked out