Short seller Hindenburg Research trained his weapons to Lordstown Motors (RIDE) after targeting EV stocks Nikola (NKLA) and Kandi Technologies (KNDI), accusing the electric truck startup of misleading investors with false orders.
Lordstown deceived investors in both demand and production capacity, Hindenburg said in a report published Friday.
“Our conversations with former employees, business partners and an extensive review of documents show that the company’s orders are largely fictitious and used as a support to raise capital and confer legitimacy,” said the short seller.
In January, Ohio-based Lordstown claimed more than 100,000 orders from fleet operators for its proposed all-electric truck. He announces a 250-mile range for Lordstown Endurance and says he is on track to start producing EV in September.
But former employees estimate that the electric truck is “3-4 years away from production, if it gets there,” said Hindenburg in his hard-hitting report. The EV “spontaneously combusted” in its first road test, it claimed.
Lordstown did not immediately respond to a request for comment. Like many new EV stocks, it has a business plan, but no revenue yet. The company purchased an old GM plant in Lordstown, Ohio, in November 2019. Its Endurance trucks cost $ 45,000 after federal electric vehicle discounts.
But it will enter a highly contested market. In the next one to three years, General Motors (GM), Ford (Faith Tesla (TSLA) all plan to bring electric pickups to the market for the first time. The same is true of EV startups, Rivian, supported by Amazon (AMZN), and Canoe (GOEV).
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RIDE stock, EV stock
Lordstown’s shares plunged 17% to 14.76 on Friday’s stock exchange. RIDE’s stock further reduced the 40-week line after falling below the 10-week line in late February, according to analysis by the MarketSmith chart.
Among other EV shares, Nikola shares lost 3.5% and Kandi fell 2.1%, with both EV shares also below their 10 and 40 week lines. Tesla fell 2.5% close to 683.
Hindenburg accused Nikola of an “ocean” of lies last September. The short seller targeted the Chinese Kandi last November, claiming she made up for the sales.
Nikola’s blunt report from the short seller led to the conclusion of a manufacturing pact with GM. This, in turn, shattered Nikola’s hopes of producing the Badger electric pickup.
Both companies refuted the accusations.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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