Start of electric trucks Lordstown Motors Corp.
confirmed that the Justice Department is investigating his business, investigating matters related to his reverse merger deal last year and pre-orders for his next truck, the Endurance.
In a regulatory filing on Thursday, the company said it had been informed by the US attorney’s office in Manhattan of its investigation, which follows one initiated by the US Securities and Exchange Commission.
EDL first reported on the Justice Department investigation earlier this month.
A spokesman for the Justice Department declined to comment.
Lordstown Motors did not immediately comment. A spokesperson said earlier this month that the company is committed to cooperating with any investigations and inquiries and hopes to focus on production with its new leadership team.
The Ohio-based startup has said it received two subpoenas from the SEC requesting documents and information related to its October merger deal with DiamondPeak Holdings Corp., a publicly traded special-purpose acquisition company.
The SEC is also seeking information related to the company’s pre-order book for its all-electric pickup. Those pre-orders had been promoted by executives and the upstart manufacturer as a sign of future demand for the Endurance, which has yet to go into production.
Shares of Lordstown Motors were largely unchanged, trading at around $ 8.89 a share on Friday morning.
The challenges have been mounting for Lordstown Motors, one of several electric vehicle startups that went public last year through merger agreements with SPAC. In recent months, it has been marred by bad news. Its executives have said it is consuming cash faster than expected, and revealed in a regulatory filing in June a going concern advisory warning that it might not survive the next 12 months without an additional injection of capital.
The company’s statements about its truck pre-orders have also come under scrutiny recently, following a report from short-seller Hindenburg Research that raised questions about its legitimacy and other aspects of its business, including whether the Endurance would begin production in September.
A Lordstown Motors board committee formed to investigate the short sellers’ claims confirmed that some of the company’s statements about its truck pre-orders were inaccurate, while the Hindenburg report was false and misleading in other respects. Around the same time the committee’s report was released, its founder and CEO Steve Burns left the company, along with several other top executives.
The federal investigations into Lordstown Motors come as the company is trying to stabilize its leadership team and is nearing the launch of its first truck, the Endurance, which executives say will begin limited production in September.
Lead Independent Director Angela Strand has taken over as CEO as the startup searches for a new CEO. He has also hired exchange specialist AP Services LLC, a subsidiary of AlixPartners LLP.
Lucid, Fisker, Rivian, and Canoo are among the well-funded startups competing to launch new electric vehicles. WSJ asked CEOs and industry experts how startups are planning to challenge Tesla’s market dominance and take on legacy automakers. Photographic composition: George Downs
Write to Ben Foldy in [email protected]
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