Shares of Lordstown Motors (RIDE) are on the rise on Thursday after the company announced that its board of directors has appointed Daniel Ninivaggi as chief executive officer and as a member of the board, effective immediately.
NEW CEO: Lordstown Motors announced that its board of directors has appointed Daniel Ninivaggi as CEO and as a member of the board, effective immediately. Ninivaggi is the former CEO of Icahn Enterprises (IEP). This comes as the electric-truck maker faces intense regulatory scrutiny and production challenges. The company is being investigated by the Securities and Exchange Commission and the Justice Department over the handling of its SPAC merger and recording of vehicle pre-orders.
Lordstown founder and its largest shareholder Steve Burns resigned as CEO back in June after the board's conclusion from an internal investigation into claims made by Hindenburg Research regarding vehicle pre-orders.
Last month, the company also announced a hedge fund had committed to purchasing up to $400M of Lordstown shares over a three-year period. Additionally, executives said that the electric-truck maker was exploring other financing options, including debt.
RESULTS: Earlier this month, Lordstown reported a second quarter loss per share of (61c), which was worse than the expected (46c). The company also reported Q2 capital expenditures of $121M and cash of $366M as of June 30, and said it is beginning limited vehicle production in late September. Additionally, Lordstown Motors said it sees full year 2021 capital expenditures between $375M-$400M, and Endurance production to be limited to coincide with commercialization roadmap.
In a post-earnings research note, RBC Capital analyst Joseph Spak lowered the firm's price target on Lordstown Motors to $1 from $5 and kept an Underperform rating on the shares after the company said along with its quarterly report that Endurance commercial deliveries are not expected until the second quarter of 2022. The analyst thinks the company will need significant capital and believes that "at least some likely to be dilutive." Lordstown's first mover advantage is "all but dissipated" with Ford's (F) F-150 Lightning starting production in Spring 2022 and GM's (GM) Silverado EV coming later that year, said Spak, who now forecasts Lordstown deliveries peaking at 7,500 in 2025. Further, the analyst said he can't recommend investors get involved at Lordstown "until a clearer strategic and financial picture emerge."
PRICE ACTION: In Thursday morning trading, shares of Lordstown have jumped almost 25% to $6.86.
Lordstown Motors
+1.42 (+25.82%)
Icahn Enterprises
-0.11 (-0.20%)
Ford
-0.15 (-1.14%)
General Motors
-0.835 (-1.68%)