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.
Are You Ahead, or Behind on Retirement? (sponsor)
If you’re one of the over 4 Million Americans set to retire this year, you may want to pay attention.
Finding a financial advisor who puts your interest first can be the difference between a rich retirement and barely getting by, and today it’s easier than ever. SmartAsset’s free tool matches you with up to three fiduciary financial advisors that serve your area in minutes. Each advisor has been carefully vetted, and must act in your best interests. Start your search now.
Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.