This high profile EV startup that went public via a SPAC merger continues to disappoint

Lordstown Motors (NASDAQ:RIDE), one of the much publicized names in the electric vehicle space has had a poor run in the public markets since the start of the year. The shares of the company are down 63% on a year-to-date basis.

The company went public last year in a reverse merger with Diamond Peak Holdings Corp., a special purpose acquisition company (SPAC). The business combination valued the company at $1.6 billion and it is currently trading below that valuation. The company received proceeds of $675 million as part of the deal to push through the initial production. In the few weeks following the announcement, shares more than tripled and reached a peak of $31.80 but have remained volatile ever since. The shares closed at $7.76 on May 11. 

Lordstown will restate financial results for 2020

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On Tuesday, Electric pickup truck maker Lordstown Motors said it will restate 2020 financial results after recently issued guidance by U.S. Securities and Exchange Commission on accounting for warrants by SPACs. The shares of the company are down 4% since yesterday. 

The SEC guidance questioned the consideration of warrants issued by SPACs as equity instruments. This may lead many SPACs including Lordstown Motors to refile their financial statements to account for the warrants as a liability. Lordstown said it would restate financial statements for the year ended December 31, 2020, such that some, if not all, of the warrants are accounted for as liabilities and marked-to-market each reporting period.

The electric pickup maker did not report any revenues for the last period and expects to start the production of its all-electric pickup truck, Endurance, in the second half of the year.

In a separate announcement, the company said that it will release the results of its first quarter 2021 before the market opens on May 17, 2021.

Other headwinds for the company

The company has been receiving negative news in the last few months. 

It hyped its participation in the desert race known as San Felipe 250. The Ohio-based EV startup withdrew from the race after completing just the first 40-mile leg of the total 242.8 mile race. 

It has also been at the receiving end of the short-seller, Hindenburg Research, that alleged the company was misleading investors on both its demand and production capabilities. After the release of the report, SEC opened an investigation, which was acknowledged by the company.

It remains to be seen whether the company is on track to start vehicle production later this year.