Lordstown Motors Faces Further Challenges as Founder Sells All Shares Amid Dispute with Foxconn

Posted on June 22, 2023

Electric vehicle (EV) startup Lordstown Motors (RIDE) continues to encounter significant hurdles in its attempt to bring its Endurance electric pickup truck to market. The situation has intensified as the company's founder and former CEO, Stephen Burns, has now sold his entire stake in Lordstown. This comes amidst an ongoing disagreement with Foxconn over funding, which could potentially lead to bankruptcy.

According to a recent Securities and Exchange Commission (SEC) filing by Lordstown, Burns no longer owns any shares in the company. Burns sold his stake in the EV startup on three separate occasions, selling 581,000 shares on May 23, 2023, an additional 200,000 on May 24, and finally 591,752 shares on June 16.

Burns launched Lordstown in 2019 after acquiring the former General Motors Lordstown plant. The company went public in 2020 through a Special Purpose Acquisition Company (SPAC) merger, leading to a significant surge in its valuation as interest in and demand for EVs reached record highs.

However, this success was short-lived. Following the release of a report by short-seller Hindenburg Research, which accused Lordstown of exaggerating pre-orders for its Endurance electric truck, the company came under scrutiny. Hindenburg highlighted that Burns, the CEO at the time, had claimed to have pre-sold 100,000 vehicles, potentially generating over $5 billion in revenue. In contrast, executives and directors had offloaded approximately $28 billion in stock, despite the company having been publicly listed for less than two years.