Hindenburg Research has set their sights on a new target by releasing a new report that paints electric vehicle (EV) startup Lordstown Motors in a less than flattering light.
If you haven’t heard of Hindenburg Research, they released a similar report on Nikola Motors last year. The lengthy report forced founder Trevor Milton to resign, and eventually led to General Motors pulling out of their partnership.
According to Hindenburg, the story of Lordstown is not all that different, calling it a “mirage” with “no revenue and no sellable product. The firm also claims Lordstown has “misled investors on both its demand and production capabilities.”
One claim it takes issue with is that the company has over 100,000 pre-orders for its electric pickup truck. Based on interviews with former employees, business partners and a review of documents, Hindenburg says most of those pre-orders are fictitious and or non-binding.
“For example, Lordstown recently announced a 14,000-truck deal from E Squared Energy, supposedly representing $735 million in sales. E Squared is based out of a small residential apartment in Texas that doesn’t operate a vehicle fleet.”
Hindenburg also points to the actions of Lordstown’s executives as an indication the company is a fraud. Since going public through a reverse merger last year, “executives and directors have unloaded ~$28 million in stock.”
Much like with their Nikola report, Hindenburg has taken a short position with Lordstown Motors after their extensive research.
You can read the full report here.
Lordstown stock dropped more than 20% after the report was released, closing at $14.78 on Friday.