Why Lordstown Stock Is Hitting Top Gear Today

Why Lordstown Stock Is Hitting Top Gear Today

Lordstown Motor Corp. RIDE shares are advancing strongly in premarket trading on Tuesday.

What Happened: The maker of electric vehicles, primarily for fleets, said Apple Inc.'s AAPL iPhone supplier Hon Hai Precision Manufacturing Company Limited HNHPF has agreed to invest up to $170 million in the company.

The investment will be in the form of a subscription to $70 million worth of Class A stock of Lordstown and up to $100 million of newly-created Series A convertible preferred stock.

See Also: Best Electric Vehicle Stocks 

Following the completion of the transaction, Hon Hai, commonly called Foxconn, will hold all of Lordstown’s preferred stock and 18.3% of its common stock on a pro forma basis.

The Taiwanese company also gets the right to designate two members to Lordstown’s board.

The proceeds will be used for a new EV program in collaboration with Foxconn. The closing of the transaction is expected on or about Nov. 22.

Price Action: In premarket trading on Tuesday, Lordstown shares were rallying 10.81% to $2.05, according to Benzinga Pro data.

 

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