- June 9, 2021
- Posted by: Carla Moz233e
- Category: Featured
- Lordstown Motors shares extend decline to 21% after the electric vehicle maker warned late Tuesday that it’s low on cash and faces shutting its doors.
- Lordstown outlined its warnings to investors with the Securities and Exchange Commission.
- The company is still targeting limited production of its Endurance pickup truck in September.
- See more stories on Insider’s business page.
Shares of Lordstown Motors fell early Wednesday, deepening losses from the previous session after the electric-vehicle maker said it doesn’t have enough cash to start producing its Endurance truck and warned that it may have to shut down altogether.
Lordstown outlined its warnings in a regulatory filing shortly before trading closed on Tuesday.
“The Company believes that our current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles,” it said in an amendment with the Securities and Exchange Commission.
Lordstown is still aiming to begin limited production in late September of its Endurance pickup truck which carries a base price tag of $52,500.
Investors quickly dragged the company’s shares sharply lower on Tuesday, leaving them down by 16.3%. The shares continued to fall before the opening bell on Wednesday, losing as much as 4.8% when they slumped to $10.68 each.
Lordstown also said it may go out of business in the next 12 months as it’s been struggling with cost increases stemming from supply chain issues and challenges posed by the COVID-19 pandemic.
“These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of the consolidated financial statements included in this report,” it said. “If we are not able to continue as a going concern, or if there is continued doubt about our ability to do so, the value of your investment would be materially and adversely affected.”
The company in its quarterly filing said it had about $587 million in cash and cash equivalents and an accumulated deficit of $259.7 million.
The start-up has previously said it’s been facing significantly higher-than-expected expenditures for parts and equipment and said in its Tuesday’s filing it may seek to raise more funds including through issuing equity or debt securities or obtaining credit from government or financial institutions.