© Reuters. U.S. Nikola’s logo is pictured at an event held to present CNH’s new full-electric and Hydrogen fuel-cell battery trucks in partnership with U.S. Nikola event in Turin

By Sanjana Shivdas and Ankit Ajmera

(Reuters) – Lordstown Motors Corp shares plunged nearly 12% on Thursday after the electric pickup truck firm disclosed a regulatory inquiry over a short seller’s report claiming the company was using “fake” orders to raise capital.

The drop was the latest sign of a recent retreat in the once high flying electric vehicle sector, whose ranks have been swollen by the recent boom in special purpose acquisition companies, or SPACS.

Nikola, another electric pickup truck startup which has been attacked by the Hindenburg in the past, separately fell more than 7% hit by a key investor cutting its stake.

Lordstown and Nikola, which both went public via acquisitions by SPACS – shell companies that use their IPO proceeds to acquire private firms – are both down roughly 50% from their highs this year. Concern about technology, as well as rising yields, have weighed on the sector.

South Korea’s Hanwha Corp will be selling up to half of its stake in Nikola, the EV maker said on Wednesday, amid concerns about the company’s future prospects.

“In this golden age of EVs there are clear growing pains and this just adds to the dynamic for the sector and Nikola,” said Wedbush analyst Daniel Ives.

Lordstown revealed on Wednesday that it received a request for information from the U.S. Securities and Exchange Commission regarding accusations by Hindenburg pertaining to its order book.

Lordstown Chief Executive Steve Burns declined to state in a CNBC TV interview on Thursday whether he had been too aggressive in characterizing the firm’s orders as ‘serious’ commitments from customers.

“We never said we had orders. We don’t have a product yet so by definition we can’t have orders,” Burns said, adding that any orders were ‘non-binding’ and were only meant to gauge customers’ interest ahead of targetted production of its Endurance trucks in September.

BTIG analyst Gregory Lewis said Lordstown’s ability get the Endurance through its beta testing phase and into production while winning orders will be the biggest driver of the stock over the next year.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link