“Those jobs have left Ohio. They’re all coming back. … Don’t move. Don’t sell your house,” – Trump at a 2017 Youngstown rally.
“Lordstown” Motor Corp (LMC) purchased the 785 acre GM plant in 2019, hoping to build the boxy, styleless all-electric Endurance pickups at the plant. The GM plant once employed over 13,000.
Hindenburg Research, an investment research firm that focuses on short-selling, released a story about Lordstown Motors, Friday, March 12, with a headline that reads: ‘The Lordstown Motors Mirage: Fake Orders, Undisclosed Production Hurdles, And a Prototype Inferno.’ (“Prototype Inferno” refers to the pickup catching fire last month.)
The latest lawsuit claims LMC CEO Steve Burns, President Rich Schmidt, and Chief Financial officer Julio Rodriguez failed to disclose that pre-orders for the company’s all-electric Endurance pickup truck were non-binding and that many of its customers lacked the means to buy the trucks.
In addition to questioning LMC’s assertion that it is on track to begin production in September, the complaint notes that the first test run of the Endurance led to the vehicle bursting into flames within ten minutes.
Like the previous three complaints filed since last month, Jesse Brury’s lawsuit is expected to become part of a class action that would allow other investors to join in questioning whether Lordstown Motors violated the Securities and Exchange act.
LMC is under investigation by the Securities Exchange Commission in regard to the “100,000 preorders” for the pickup and the merger with DiamondPeak. LMC CEO Steve Burns did not reveal the SEC investigation for a month.
On February 11 LMC stock (RIDE) sold for $31.57, last Thursday it was down to $12.32.
The “Lordstown” plant is located about 20 miles from Youngstown, NW route.
This is the third in a series of discussions about the legal questions surrounding LMC, the first two may be found here and here.