Lordstown Motors, the electric vehicle start-up fighting for survival, announced on Monday the resignation of its chief executive, Steve Burns, and chief financial officer, Julio Rodriguez, after the results of a board investigation into an investor’s report questioning the company’s viability and statements about customer interest in its electric trucks.
The resignations are effective immediately, and Lordstown has hired an executive search firm to find their replacements.
The company released the results of an investigation by a committee of its board into a March report by Hindenburg Research, a bearish investor, which took aim at Lordstown shortly after it went public last October.
The committee found the report was “false and misleading” as it pertained to the viability of Lordstown’s technology and its timeline for rolling out vehicles. Still, the company’s report, led by the law firm Sullivan & Cromwell, acknowledged “issues regarding the accuracy of certain statements regarding the company’s pre-orders.”
Lordstown warned last week it did not have enough cash to start commercial production of its electric pickup truck and might have to close its doors. The company has been the subject of an investigation by the Securities and Exchange Commission focusing in part on its merger last October with a special purpose acquisition company, or SPAC. Sullivan & Cromwell served as an adviser on the merger.
The S.E.C. has sent at least two subpoenas to Lordstown seeking information related to its statements about customer orders for trucks.
The resignations come just a week before Lordstown was scheduled to host an event at its factory for investors, analysts, customers and partners. The company intended to showcase work on its Endurance electric truck.
Mr. Burns was the driving force behind Lordstown — founding the company just months after he stepped down as chief executive at Workhorse, another electric vehicle company. The company was born shortly after General Motors announced it was shuttering the Ohio factory and struck a deal to finance the sale of the factory to Lordstown.
Lordstown was one of the first big mergers of a start-up with no profits and a SPAC, a holding company that raises money from investors in the hopes of finding a merger partner. Lordstown’s deal with the SPAC, Diamond Peak Holdings, was announced in August and closed just a few months later. The company raised $675 million as part of the merger.
G.M. declined on Monday to comment on Lordstown’s announcement of the resignations, as did Goldman Sachs, which helped arrange the company’s merger with DiamondPeak.
Other electric vehicle companies that have completed or proposed SPAC deals have also had trouble living up to their big promises and had to replace their top executives.
Trevor Milton stepped down as executive chairman of the electric truck company Nikola shortly after Hindenburg issued a report accusing him of making numerous false assertions about the company’s technology. Nikola has rebutted some of Hindenburg’s claims but has acknowledged that some of its past statements were false.
And in April, Ulrich Kranz, the chief executive of Canoo, which is developing an electric vans, pickup trucks and other vehicles, resigned. Canoo, which completed its SPAC merger in December, said last month that the S.E.C. had opened an inquiry into various aspects of its business.
Companies merging with SPACs often issue rosy financial forecasts, a practice that is restricted in conventional initial public offerings. The S.E.C. is now scrutinizing such promises more closely. SPAC deals also come together much more quickly than I.P.O.s and executives do not typically have to participate in a road show to pitch their stock to investors. That is partly why companies that have merged with SPACs have become targets for short sellers, who make money by betting that a stock is overvalued and its price is poised to drop.
Lordstown said that it had appointed its lead independent director, Angela Strand, executive chairwoman while it looks for a permanent chief executive. Becky Roof will serve as interim chief financial officer.
One of the members of the board committee that ordered the law firm’s report was David T. Hamamoto, a sponsor of the Diamond Peak SPAC.
Lordstown, in announcing last week it may not have enough money to survive, also said it had found material weaknesses in it financial reporting system.
Shares of Lordstown were trading down about 17 percent on Monday morning.
"board" - Google News
June 14, 2021 at 07:07PM
https://ift.tt/3pS1Ogf
Lordstown Motors' Top Executives Resign After Board Investigation - The New York Times
"board" - Google News
https://ift.tt/2KWL1EQ
https://ift.tt/2YrjQdq
Bagikan Berita Ini
0 Response to "Lordstown Motors' Top Executives Resign After Board Investigation - The New York Times"
Post a Comment