CNBC’s LeBeau: Lordstown needs to ‘move quickly’ with new CEO search

Lordstown Motors Corp (NASDAQ: RIDE) tanked about 20% in the stock market on Monday morning as both its CEO and CFO announced resignations, effective immediately. Chief executive Steve Burn also stepped down from the company’s Board of Directors.  

According to CNBC’s Phil LeBeau, however, this shakeup isn’t a huge surprise. On “Squawk on the Street”, Phil said on Monday:

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“Lordstown Motors published results of an independent investigation this morning that was looking into the allegations from Hindenburg Research, which essentially said, look, the endurance and the claims about orders are a bunch of bull. Well, they say that most of the claims from Hindenburg were false and misleading. However, Lordstown’s investigation did find that there were issues surrounding some of the statements regarding preorders for the endurance.”

Angela Strand becomes Lordstown’s executive chairwoman

The American electric vehicle automaker is now searching for a new CEO. In the meantime, Angela Strand will take on the role of the company’s executive chairwoman.

Lordstown Motors has already expressed plans to have the endurance go into production by the end of September. The company, however, is low on cash, and now that it is going under a big management change as well, investors are questioning if it’ll be able to deliver on its promise. The news comes weeks after the company’s management said it needs to raise new cash.

Commenting further on the future of Lordstown Motors, Phil said:

“Their first-mover advantage was really the only advantage that they had. They could say we’re going to roll out an electric pick-up truck before anybody else. If they don’t start production by the end of September, what advantage do they have? Fleet operators won’t go with an untested vehicle from a company that hasn’t built a single vehicle as opposed to the New F-150 Lightning.”

Lordstown needs a CEO with operational expertise

The CNBC expert fixated on the need for the U.S. company to get someone on board as the chief executive who has operational expertise and background within the auto industry.

“Somebody has to come in, and they have to make moves immediately. Whether it’s raising cash, or striking an agreement or anything else. They have to move quickly,” he added.

Lordstown shares are now exchanging hands at $9.43 (£6.68) versus a year-to-date high of $30.75 in early February. At the time of writing, the Ohio-based company has a market cap of $1.68 billion.