Wednesday, July 2, 2025

Lordstown Motors: Despite Recent Decline, Valuation Remains Elevated

As we reported on June 14, Lordstown Motors Corp.’s (NASDAQ: RIDE) CEO Steve Burns and CFO Julio Rodriguez resigned after Lordstown’s Board released the results of an investigation. The investigation was related to allegations put forth by the short seller Hindenburg Research in a scathing research report published March 12. 

That firm alleged that the 100,000+ pre-orders that Lordstown received for its Endurance electric pickup truck are “largely fictitious.” Lordstown’s Board essentially confirmed that statement. Lordstown’s stock fell on the news, and it is has lost about two-thirds of its value from its mid-February high of just over US$30. However, it is still about 40% higher (~US$10 versus ~US$7) than its mid-May 2021 lows.

After analyzing Lordstown’s recent disclosures and other factors surrounding the stock, it is possible that Lordstown shares could face even further downside:

  • Lordstown installed Angela Strand as chairwoman of the company. She will manage Lordstown until it finds a permanent CEO. Ms. Strand has had management and board roles with several electric vehicle (EV)-related companies but has no experience in bringing a vehicle to production.
  • Becky Roof, a Managing Director of the global consulting firm Alix Partners LLP has been appointed Interim CFO (at about US$1,200 per hour). In addition, Lordstown has signed a Management Services Agreement with Alix Partners. Two of the core services provided by the consulting firm are Turnaround & Restructuring Consulting and Bankruptcy, Insolvency & Case Management.

At least one analyst who covers Lordstown conjectured that the management change could mean an expensive re-design of the company’s Endurance pickup truck. The Endurance model has a unique design; its chassis has only four moving parts — in-wheel hub motors created by Elaphe Propulsion Technologies in each of its four wheels. In this way, the Endurance will have among the fewest parts of any highway-capable production vehicle ever made.

The vehicle however has experienced safety and performance problems. According to a police report cited by Hindenburg Research in its memo, the vehicle became engulfed in flames (not caused by an accident) shortly into its first test drive in January 2021. Also, according to thedrive.com, the truck entered a grueling desert race in Baja, California in April 2021. It completed just 40 miles of the 280-mile race (although the company said its goal was only to complete 40 miles of the extreme conditions of the course).

Reportedly, picture of a burned out Endurance pickup on its first test drive.

On June 15, company management reiterated its projection that Endurance production would commence in late September 2021. Lordstown also made that estimate on its May 24 first quarter conference call. The company went on to say that it has “binding” orders for 2021 and 2022 but declined to give the quantity of those orders.

Those comments however were refuted by the company itself just days later, when in an 8-K filing the company stated plainly, “we have no binding purchase orders or commitments from customers.” The follow-up was made to “clarify recent remarks by company executives.”

Steve Burns, the CEO who was forced to resign, is Lordstown’s largest shareholder. According to Refinitiv.com, he holds 26% of the total shares outstanding. It is unclear what his plans are for his holdings.

Lordstown Motors faces several challenges over the next few months, including raising funds from a strategic investor to continue its operations. The company’s bargaining power in such negotiations appears quite limited. Nevertheless, Lordstown’s enterprise value is still about US$1.4 billion (US$1.8 billion less about US$400 million of cash on its balance sheet). That enterprise value level could be pressured as the company attempts to surmount its financial and operating issues over the next few months.

Lordstown Motors Corp. last traded at US$10.49 on the NASDAQ.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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