Lordstown Motors’ electric pickup truck, the Endurance, in October.
MEGAN JELINGER/AFP via Getty Images
Stock in electric-pickup truck maker Lordstown Motors is soaring, even though there isn’t much news to explain the move. A mix of smaller, tangential factors seems to be what it took to relieve some of Lordstown investors’ recent pain.
Lordstown (ticker: RIDE) shares rose almost 20% Tuesday, bringing the gain since the close of trading on Friday to about 37%.
The biggest development Monday was word from management that it would be holding “Lordstown Week” in June. The planned gathering was billed as “a weeklong event at the company’s Ohio headquarters …featuring factory tours, presentations and test drives of the Lordstown Endurance, the world’s first all electric commercial pickup truck.”
An analyst event typically doesn’t move a stock that much, but it could be a factor.
Another explanation is earnings, or financial reports, to be more precise. Most small-capitalization EV companies don’t yet have sales, so their quarterly reports don’t include earnings. Instead, they are an opportunity for companies to update investors about vehicle development.
Fisker (FSR), another EV manufacturer, reported first-quarter numbers Monday evening. There were no surprises and shares rallied almost 9% Tuesday. One stock moving higher can often translate to gains for a peer as investors look at relative valuations between companies.
Lordstown is slated to report its numbers this coming week.
Lordstown and Fisker are linked in another way. Both are heavily shorted. Roughly 25% of shares available for trading in both firms have been sold short meaning investors have borrowed stock and sold it, betting that the prices will fall. The average short interest in an S&P 500 stock is close to 2% of shares available for trading.
The short bets have worked out. Fisker stock is down 32% over the past three months, while Lordstown shares are off more than 50% over the same span. After steep declines, almost any news can catalyze a rally as bearish investors take money off the table, buying stock and replacing the borrowed shares.
That is three reasons to explain the gains. President Joe Biden might be the fourth. He spoke Tuesday, reiterating his plan to support electric-vehicle technologies. Biden has been steadfast in his support of EVs since taking office, so his support isn’t a surprise. Still, after the brutal declines in EV stocks, investors are happy to be reminded.
Other EV stocks were up as well on Monday, but none had risen as much as Lordstown and Fisker. Tesla (TSLA) shares eked out a 0.2% gain, while Canoo (GOEV) stock was up 0.5%. Tesla isn’t as heavily shorted as Fisker and Lordstown shares. Canoo stock is heavily shorted, but it doesn’t have a coming analyst event like Lordstown.
None of those stocks had the same heady combination of factors that lifted Lordstown.
Write to Al Root at [email protected]
