Lordstown Motors Stock Getting Suspended – The Detroit Bureau

Just one day after filing for Chapter 11 bankruptcy and filing a lawsuit against partner Foxconn, Lordstown Motors received a deslisting notice Wednesday from Nasdaq.

The electric pickup maker revealed the notice in a filing Thursday with the Securities and Exchange Commission, noting the exchange said it will suspend trading the stock (RIDE.O) July 7. The move is a standard practice by Nasdaq, and the company said in the filing it doesn’t plan to appeal the move.

Nasdaq suspending the company’s stock is what put Lordstown back into the spotlight in recent weeks. In April, the exchange informed the company it was in danger of being delisted because its stock traded below $1 per share for 30 consecutive trading days. 

The company then floated the idea of a reverse stock split, ranging from ratios of 3-to-1 all the way to 15-to-1. On May 23, it pulled the trigger on the move using the 15-to-1 split. Naturally, the stock price jumped, into the $6 range. 

It fell steadily into June, getting down to $2.89 per share on June 12, before enjoying a resurgence up to $4.21 a share June 15, before sliding down again to Thursday’s opening price of $2.11 a share. It’s current up to $2.14 in mid-morning trading.

Bankruptcy moves

The company’s Chapter 11 filing in Delaware saw its all of its first day motions approved by the court, which officials say will allow the company to continue operating without interruption. With the motions approved, the company plans to focus on finding a buyer for the Ohio-based EV maker.

It also said plans to “continue vigorously pursuing” its lawsuit against Hon Hai Technology Group, better known as Foxconn.

“We are pleased with the Court’s approval of our first day motions, which enable Lordstown to move forward with the elements of our strategic restructuring process,” said Edward Hightower, CEO & president of Lordstown. 

“(W)e can now turn toward preparing to initiate our sale process to maximize the value of Lordstown’s assets. I am proud of our team and look forward to continuing to work alongside them as we move into this next phase.”

Suing Foxconn

While filing bankruptcy, Lordstown also filed a complaint against Taiwanese corporation Foxconn, with which Lordstown had a partnership that turned acrimonious. 

Lordstown’s had a simmering dispute with Foxconn for some time. That dispute has now flared into litigation. At the same time as it filed for reorganization, Lordstown also filed suit against global technology company Hon Hai Technology Group and certain of its affiliates, including Foxconn Ventures Pte. Ltd. 

The litigation alleges fraud and willful and consistent failure by Foxconn to live up to its commercial and financial commitments to Lordstown.

“Despite our best efforts and earnest commitment to the partnership, Foxconn willfully and repeatedly failed to execute on the agreed-upon strategy, leaving us with Chapter 11 as the only viable option to maximize the value of Lordstown’s assets for the benefit of our stakeholders,” Hightower said. “We will vigorously pursue our litigation claims against Foxconn accordingly.”

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• Source: https://www.thedetroitbureau.com/2023/06/lordstown-motors-stock-getting-suspended/