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Troubled EV Maker Lordstown Motors' Survival Hopes Rests On Fresh Funds, Valuation

Benzinga Real-time News ·  May 17, 2022 08:30

  • $Lordstown Motors(RIDE.US)$CFO acknowledged that it would be difficult to sustain the business for at least another year after it sold its factory to raise cash, the Wall Street Journal reports.

  • Adam Kroll found it challenging to sustain pending more funding and a surge in market valuation.

  • Lordstown needs to raise an additional $150 million in the capital before the 2022 end to execute its plans of building about 500 vehicles. 

  • Lordstown looks to have at least $75 million - $100 million in cash on its balance sheet at the 2022 end.

  • Lordstown could raise funds through a public or private offering to institutional investors.

  • Analysts remain skeptical about the company's outlook, pointing to issues including fundraising and changing investor sentiment.

  • Lordstown, which aims to launch its first vehicle this year and does not generate any revenue yet, issued a going-concern warning in June 2021.

  • Lordstown looks to crash testing the Endurance, its debut vehicle, with commercial production by the third quarter.

  • Lordstown recently sold its Ohio factory for $230 million to Apple Inc (NASDAQ:AAPL) supplier Hon Hai Precision Industry Co Ltd (OTC:HNHPF), operating as Foxconn Technology Group.

  • Foxconn will build the Endurance for Lordstown and has earmarked $100 million for their new joint venture.

  • Price Action: RIDE shares traded higher by 0.88% at $2.29 in the premarket on the last check Tuesday.

  • Photo via Wikimedia Commons

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