Electric truck maker Lordstown's CEO, CFO resign amid production woes, shares slide

Lordstown Motors Corp on Monday said its chief executive officer and the chief financial officer had resigned following an investigation into allegations that the company lied about pre-orders data for its electric pickup truck.

The founder Steve Burns has exited from his position of CEO and also from the board of directors. At the same time, CFO Julio Rodriguez has also departed. The decision came days after the EV maker warned that it might not have enough money to stay in business over the next year.

In March, Hindenburg Research, a short-seller firm, reported a dispute over the electric pickup truck manufacturer’s statistics, published in January, that 100,000 pre-orders have been made and said, “extensive research reveals that the company’s orders appear largely fictitious and used as a prop to raise capital and confer legitimacy.”

Hindenburg also noted that Lordstown has “no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities.”

Lordstown has acknowledged that some disclosures which the firm made about pre-orders for the truck were “inaccurate.”

However, it rejected Hindenburg’s accusations and said it did not overstate its technological viability and misled investors about its production plans.

The EV maker appointed lead independent director Angela Strand as the executive chairperson to oversee the company’s transition until it appoints a permanent CEO.

Becky Roof was named interim CFO, with immediate effect. Roof had previously served as interim CFO at numerous companies, including Eastman Kodak and Hudson’s Bay Co.

After the publication of Hindenburg’s report, the U.S. Securities and Exchange Commission (SEC) started an inquiry on the Ohio-based electric automaker and asked the company for information about its pre-order data and SPAC merger with DiamondPeak Holdings Corp, with a market value of $1.6 billion.

Since the previous week, the shares are free-falling after the company announced that it is on the brink of bankruptcy. On Monday, shares fell about 22% to $8.91 compared to the last closing on Friday.

The company has tried to ease some worries and said it talked with multiple parties to raise funds.

Picture Credit: FT