SPAC: Lordstown CEO, CFO Resign After Cash Woes
At electric vehicle startup Lordstown Motors, two of its top executives have resigned shortly after the company warned that it didn’t have sufficient cash to kick off production of its electric truck. Those two executives are CEO Steven Burns and CFO Julio Rodriguez, effective immediately.
- The leadership change at Lordstown follows a pattern at struggling companies. In Lordstown’s case, the company says it doesn’t have enough capital to fund the production of its electric truck despite raising $675mn from a SPAC merger last year.
- It’s quite a drastic turn for Lordstown which debuted on the public markets last year with ambitious, wild promises to its investors. Even then, the company said it didn’t expect to raise further capital after the $675mn from its SPAC deal but now appears to be hurting for cash.
- In March, Lordstown was accused of fraud by short-seller Hindenburg Research, which alleged highly faked pre-orders and undisclosed production challenges to investors. This was under the leadership of Burns, who’s now out of the company he founded.
- The Lordstown saga bears similarities to one we’ve seen in another electric vehicle startup called Nikola. SPAC deal? check, hefty allegations by the same short-seller? check, nothing to show yet for production, check? CEO then booted out, check.
- After announcing the resignations, Lordstown stock (NASDAQ: RIDE) fell 18.8% during trading on Monday.