Hindenburg Hits Lordstown Motors, Alleging Fraud In Business Operations

Hindenburg Research has issued a blistering short report on Lordstown Motors Corporation RIDE, accusing the company of fraud and going short on the Ohio-based electric truck maker.

What Happened: In a report titled “The Lordstown Motors “Mirage”: Fake Orders, Undisclosed Production Hurdles, And A Prototype Inferno,” Hindenburg stated an investigation into the company revealed a significant disconnect between how it's promoting itself and the real world.

Hindenburg, whose website was not functioning this morning, also published an extensive thread on Twitter highlighting its findings.

“Lordstown is an EV SPAC with no revenue and no sellable product, which we believe has grossly misled investors on both its demand and production capabilities,” Hindenburg tweeted.

“$RIDE has consistently pointed to its book of 100,000 pre-orders as proof of demand for its proposed EV truck. Our extensive research reveals that the company’s orders appear largely fictitious and used as a prop to raise capital and confer legitimacy.”

This latest short report comes months after Hindenburg hit Nikola NKLA, another electric vehicle startup.

Click here to check out Benzinga’s EV Hub for the latest electric vehicles news.

Why It's Important: Hindenburg cited several examples of what it claimed to be evidence of Lordstown’s chicanery:

  • The alleged $735 million deal for 14,000 trucks with E Squared Energy, which Hindenburg said “is based out of a small residential apartment in Texas that doesn't operate a vehicle fleet";
  • A 1,000-truck, $52.5 million order comes from a two-person startup whose owner stated there was no vehicle order;
  • A half-dozen non-binding orders from customers who do not operate fleets.

Furthermore, Hindenburg called out Lordstown to feature the CEO of Grid-X in its marketing materials – the chief executive told Hindenburg he never heard of Lordstown.

The Hindenburg research also cited former Lordstown employees who described company founder and CEO Steve Burns as a “con man” or a “PT Barnum” figure.

“One senior employee told us that, while working with Steve, they saw more questionable & unethical business practices than they had seen in their career,” Hindenburg said.

As for Lordstown’s vehicles, Hindenburg cited a former employee who said the company was three to four years away from production due to “drastic” design modifications. The first street road test for a Lordstown vehicle occurred in January, with the vehicle bursting into flames 10 minutes into the drive.

What's Next: Hindenburg observed that Lordstown “only went public in October 2020, but in that brief time, executives and directors have unloaded ~$28 million in stock. We think it bodes poorly when executives unload stock in a company with no actual product that claims to be on the cusp of mass-production.

“$RIDE's story has brought hope to investors and a hard-hit local community, but we don't think the company has been transparent … We are short shares of $RIDE.”

Benzinga reached out to Lordstown for comment, but as of this writing has received no response.

Lordstown's stock was down 20% to $14.10 at publication time.





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