Lordstown Motors’ shares tumble after slashing 2021 production plans, says it needs more capital

Lordstown Motors Corp Chief Executive Steve Burns poses with a prototype of the electrical car starting up-up’s Endurance pickup truck, which this is in a position to originate building within the 2d half of 2021, at the firm’s plant in Lordstown, Ohio, U.S. June 25, 2020.

Lordstown Motors | Reuters

Shares of Lordstown Motors tumbled more than 9% for the length of after-hours trading after the firm slashed its production guidance for the year and acknowledged this is in a position to must resolve additional capital.

In a narrate Monday, Lordstown CEO Steve Burns acknowledged the firm has “encountered some challenges” because it prepares to originate production of an electrical pickup truck known as the Endurance in behind-September.

Lordstown acknowledged it expects to tag — at easiest — half of the vehicles it previously forecasted this year. It also acknowledged its projected prices will be between $335 million and $350 million, up from between $220 million and $235 million. It also lowered its forecast for year-cease liquidity from at the least $200 million to between $50 million and $75 million in cash and cash equivalents.

Burns cited “vastly elevated than expected expenditures for system/instruments, expedited shipping prices, and costs associated with third-celebration engineering sources” as reasons for the develop in prices.

“We secured a preference of severe system and instruments upfront, so we are restful in a position to ramp the Endurance, but we attain need additional capital to effect on our plans,” he acknowledged. “We judge we have several alternatives to resolve capital in various sorts and delight in begun those discussions.”

The changes are essentially the most smartly-liked blow to Lordstown. Shares of the aspiring automaker tumbled remaining week after Wolfe Analysis downgraded the stock to underperform with a $1 tag goal following the debut of the Ford F-150 electrical pickup, a competitor to the Lordstown Endurance.

In March, Lordstown also confirmed the U.S. Securities and Replace Commission had requested facts referring to claims by quick vendor Hindenburg Analysis that it misled investors.

Hindenburg accused Lordstown in a March file of using “unsuitable” orders to resolve capital for the Endurance. The quick vendor claimed the pickup became once years a long way from production, then all any other time Lordstown maintains or no longer it is now not off beam to starting up making the automobile in September.

Lordstown went public via a a lot of motive acquisition firm, or SPAC, in October. It is amongst a growing crew of electrical car starting up-u.s.going public via presents with SPACs, which delight in change into a favored intention of raising cash on Wall Facet dual carriageway on sage of they’ve a more streamlined regulatory direction of than ragged preliminary public offerings.