Lordstown Motors Lays Out Its Numbers. Earnings Don’t Matter Yet, but Spending Does.
Lordstown picked Endurance for the name of its all-electric pickup truck.
Courtesy Lordstime
Lordstown Motors reported fourth-quarter numbers Wednesday evening. Earnings don’t matter much, though, since the electric truck maker doesn’t sell anything yet. But spending does—and that’s what investors are paying attention to, especially after what has been a rocky few days for the stock.
Lordstown (ticker: RIDE) expects to spend about $250 million to $275 million this year on capital equipment, getting the plant that it bought from General Motors (GM) ready to produce its all-electric pickup truck called Endurance. The company also expects to spend another $220 million or so on expenses. That would leave Lordstown with about $200 million by year-end 2021.
Spending looks higher than Wall Street expected, based on projections aggregated by Bloomberg. Higher-than-expected cash outflows will probably pressure the stock Thursday. Shares are down about 3.8% in after-hours trading.
Still, it’s hard to tell exactly what will happen with the stock price. Shares are already down about 15% since Friday, when a short seller published a negative research report about Lordstown. Hindenburg Research alleged the company’s backlog isn’t as solid as investors believe. Lordstown reports more than 100,000 preorders for its electric truck.
The company put out a brief statement Monday, saying only that management knew of the report and would respond in due time. Lordstown also said, and repeated in its earnings release Wednesday, that it’s on track to start producing the Endurance in September.
Management talked a bit more about the short seller’s report on the earnings conference call. “We’ve also received a request for information from the SEC and we are cooperating with that inquiry,” said CEO Steve Burns. “In addition, the Board of Directors has formed a special committee to review these matters.”
Investors will have to wait to get more clarity about the issues raised in the negative report. Until then they will watch the development timeline of the Endurance.
Write to Al Root at [email protected]
