Lordstown Motors Stock Is Soaring Because It Has a New CEO
The company named Daniel Ninivaggi as its new CEO Thursday morning, effective immediately. Lordstown (ticker: RIDE) shares are up 25% to $6.88 in early trading. The
is down 0.1%. The
Dow Jones Industrial Average
is up 0.2%.
Ninivaggi takes over from board chair Angela Strand, who ran the company after the departure of Steve Burns in June. Burns left shortly after the company received a “going concern” warning from its auditor. That warning, essentially, means the company might not have the capital required to keep operating without a significant change.
The company is also being investigated by the Securities and Exchange Commission and the Justice Department regarding the handling of its SPAC merger and recording of vehicle preorders. Vehicle preorders were an issue raised in a negative research report by a short seller in March. The short seller’s report prompted an internal investigation whose findings were published in June. The company has disputed claims made in the short seller’s report.
Lordstown stock hit a 52-week low on Aug. 19. Shares have rallied off the bottom and, including Thursday’s gains, are up about 44% from a nadir of $4.77 a share. Still, shares are off about 80% from their 52-week high of almost $32.
Ninivaggi is the former CEO of
(IEP) and has served in a “variety of senior leadership positions in the automotive and transportation industries,” according to the company. His previous automotive jobs include stints at parts suppliers
(LEA) and Federal-Mogul. He also serves on the board of
(GTX), the turbocharger business spun out of
“I believe the demand for full-size electric pickup trucks will be strong and the Endurance truck…has the opportunity to capture a meaningful share of the market,” said Ninivaggi. The Endurance, Lordstown’s first product, is due to start production in the coming months. “I look forward to working with the talented Lordstown management team, our suppliers and other partners to bring the Endurance to market and maximize the value of our assets.”
Ninivaggi will have a tough job. Wall Street has soured on Lordstown stock. Only one out of eight analysts, or 13%, rates shares Buy. The average Buy-rating ratio for small-capitalization stocks is about 60%. What’s more, 50% rate shares Sell. The average price target of the sell-rated analysts is about $1.55 a share.
Write to Al Root at [email protected]
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