Investors in the struggling electric vehicle manufacturer, Lordstown Motors, were hoping for a reversal of fortune, but unfortunately, it appears the company is headed for bankruptcy. Lordstown recently received a delisting notice from Nasdaq, and its stock has fallen to $.47, a significant decline from its 52-week high of $3.73. A reverse stock split is often the final effort of a publicly traded company that is struggling to survive. Lordstown’s market capitalization has dwindled to a mere $124 million.
Lordstown’s investors should have seen its demise coming. They were given a great deal of warning. In its most recently reported quarter, it lost $102 million on almost non-existent sales. A complex deal with Foxconn may have put $150 million. But Lordstown could burn through that in a few months.
Lordstown’s recent troubles began just before the release of its earnings report. It shuttered production and had a recall. The company’s initial attempts to establish a foothold in the electric vehicle market were unsuccessful, effectively preventing it from becoming a major player in the EV industry.
Lordstown made several mistakes before its final one. It priced its Endurance pick-up at $65,000. Before Ford jacked up prices on its F-150 Lightning, it was priced at about $40,000. The F-150 gas-powered version sells over 600,000 units a year. It has a built-in market of customers Lordstown could never have had. (These are America’s favorite pick-up trucks.)
The EV market had become more dynamic than it was when Lordstown announced the Endurance. Chevy and Ram are about to enter the EV pickup markets. EV vehicle sales leader Tesla will as well. Along with a market that is about to be flooded, there have been, and will be, brutal price cuts to grab market share. A $65,000 vehicle would never have had a chance. (These are the biggest electric vehicle business failures in American history.)
Lordstown’s success was always a long shot. Now, it is not a shot at all.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
