Lordstown Motors gasps for air, issues warning regarding its financial health
|driving.ca 10 Jun 2021 at 14:48|
Fledgling electric pickup truck company Lordstown Motors is sounding the alarm on its financial health. Just months after CEO Steve Burns took to television airwaves to tamp down concerns about legitimacy of reservation numbers, a filing with the Securities and Exchange Commission (SEC) by the company casts doubt on its own survival.
Speaking to its level of cash flow, or lack thereof, Lordstown Motors told the SEC its current condition “raises substantial doubt regarding our ability to continue as a going concern.”
While it apparently had access to about half-a-billion dollars of cash and cash equivalents as of the close of Q1, the company says this is a sum insufficient to carry out its plans to launch the all-electric Endurance pickup truck.
At present, Lordstown is talking about securing more funding from investors and the prospect of asset-backed financing. In layman’s terms, that means they’re asking people for money and considering potentially mortgaging the place to raise cash. Its stock price currently sits around $10, about the same valuation as when the company went public in 2019 and well off the nearly $27 mark it saw in February of this year.
If Lordstown Motors does fall on its face, this author won’t feel the least bit of sympathy for CEO Steve Burns, who not only chose to turn a reveal of the Endurance into a political rally where audience members were treated to a 23-minute election year stump speech, but also played fast and loose with the term ‘orders’. On January 11, the man was quoted saying “Receiving 100,000 pre-orders from commercial fleets for a truck like the Endurance is unprecedented in automotive history.” We can then fast-forward to March 18 when Burns sputtered “We never said we had orders,” in response to tough questions about his company before nattering on about ‘non-binding letters of intent’.
Lordstown Motors turns EV pickup reveal into political rally
This author will feel sympathy for the good people of Ohio, hard-working assembly line folks who have weathered the closure of a General Motors plant only to have their hopes raised – and now potentially dashed – by Steve Burns and his merry band of business acquaintances, who at one point promised to hire 400 workers.
As of this writing, the Lordstown website continues to happily take money in the form of a $100 ‘vehicle deposit’ for the Endurance pickup.