SAN FRANCISCO — Lordstown Motors said on Wednesday it had received a request for information from the U.S. securities regulator regarding accusations by an investor that took a short position in the stock and accused the electric truck startup of misleading consumers and investors.
Last week, Hindenburg Research revealed it had taken a short position in Lordstown Motors, accusing the company of using “fake” orders to raise capital and claiming that its upcoming truck is three to four years away from production.
“We are cooperating with that inquiry,” Lordstown Motors CEO Steve Burns said during an earnings conference call, referring to the U.S. Securities and Exchange Commission’s request for information.
He also said Lordstown’s board of directors has formed a special committee to review the matters.
Short sellers bet that the price of a stock will fall by borrowing shares in the hope of buying them back at a cheaper price and pocketing the difference.
Shares of Lordstown Motors were down 5% in extended trading on Wednesday.
“Our conversations with former employees, business partners and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy,” Hindenburg said last Friday.
The company, which in 2019 acquired a shuttered General Motors plant in Lordstown, Ohio, said on Wednesday it remained on track to begin producing its Endurance electric pickup truck in September as planned, with a plan to build its test vehicles this month.
It also plans to unveil the demonstration model of its second vehicle, an electric van, this summer, with a goal to start production in the second half of 2022.
Lordstown reported a loss of 23 cents per share during the October to December quarter. It said it plans up to $275 million in capital expenditures this year, including investment to expand annual production capacity to 60,000 vehicles next year.