Lordstown Motors faces SEC inquiry over accusations by short seller

Key Points
  • Lordstown Motors on Wednesday said it received a request for information from the U.S. Securities and Exchange Commission regarding a report by shortseller Hindenburg Research, and the company is cooperating with the SEC inquiry.
  • The Ohio-based electric pickup-truck startup said on an earnings conference call that its board of directors has formed a special committee to review the matter.

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The Lordstown Motors factory is where GM once operated, in Lordstown, Ohio, on October 16, 2020.
Megan Jelinger | AFP | Getty Images

Lordstown Motors said on Wednesday it received a request for information from the U.S. securities regulator regarding accusations by an investor that took a short position in the stock and accused the electric truck startup of misleading consumers and investors.

Last week, Hindenburg Research revealed it had taken a short position in Lordstown Motors, accusing the company of using "fake" orders to raise capital and claiming that its upcoming truck is three to four years away from production.

"We are cooperating with that inquiry," Lordstown Motors CEO Steve Burns said during an earnings conference call, referring to the U.S. Securities and Exchange Commission's request for information.

He also said its board of directors has formed a special committee to review the matters.

Short sellers bet that the price of a stock will fall by borrowing shares in the hope of buying them back at a cheaper price and pocketing the difference.

Shares of Lordstown Motors were down 5% in extended trade on Wednesday.

The company, which in 2019 acquired a shuttered General Motors plant in Ohio, said on Wednesday it remained on track to begin producing its Endurance electric pickup truck in September as planned, with a plan to build its test vehicles by March.

It also plans to unveil the demonstration model of its second vehicle, an electric van, this summer, with a goal to start production in the second half of 2022.

It reported a loss of 23 cents per share during the October to December quarter. It said it plans up to $275 million in capital expenditures this year, including investment to expand annual production capacity to 60,000 vehicles next year.