Shares of embattled EV start-up Lordstown Motors surge on appointment of ex-Icahn executive as CEO
The Lordstown Motors Corp. Endurance electric pickup truck sits on stage during an unveiling event in Lordstown, Ohio, U.S., on Thursday, June 25, 2020.
Matthew Hatcher | Bloomberg | Getty Images
The volatile stock was up by as much as 41.4% in intraday trading before leveling off to about $6.40 a share, an increase of 16.2% Thursday afternoon. The stock has ranged from a low of $4.77 a share to as high as $31.80 a share during the past 52 weeks.
Ninivaggi downplayed the stock’s Thursday performance, telling CNBC that he’s focused on achieving short-term objectives that will solidify the company for the long-term.
“I don’t care about the stock price, day-to-day. But, we definitely have to work on investor confidence. And we do that by delivering on our production plan and getting through all of our testing and certifications,” he said during a phone interview Thursday.
Ninivaggi, whose annual base salary will be $750,000, said he does not plan to change the company’s previously announced goals or plans at this point.
Ohio-based Lordstown Motors is yet to produce a saleable vehicle. It expects to begin limited production of its first product, an electric pickup truck called the Endurance, in late September, followed by vehicle validation and regulatory approval in December or January. Sales and deliveries will then follow, according to Ninivaggi.
“Now we’ve got to execute and get this truck out the door,” he said. “That’s what I’m focused on. It’s not sexy, but, we need to get the truck out the door, and deliver performance, and commercialize it.
We know we’ve got to actually vote because we got to get this, this truck out the door.
The appointment of Ninivaggi, whose experience prior to working for billionaire Carl Icahn was largely in automotive suppliers, is effective immediately, the company said. He will retain his position as chairman of auto supplier Garrett Motion, according to a Lordstown spokeswoman.
Ninivaggi, 57, said he hasn’t and doesn’t plan to approach Icahn as a potential investor in the company. In May, Lordstown said there was “substantial doubt” about its ability to continue as a going concern in the next year because of problems funding the production of its vehicle. It’s currently seeking additional funding.
Ninivaggi replaces company founder Steve Burns, who left the automaker in June following an internal investigation finding “issues regarding the accuracy of certain statements regarding” Lordstown’s preorders, specifically the seriousness of the orders and who was making them.
“The Board is enthusiastic about Dan’s appointment as CEO. We are impressed with his broad automotive background, track record, strategic thinking, and team-oriented leadership talent. Furthermore, his capital markets expertise and investment proficiency will be invaluable in navigating the company through its commercial ramp-up, capital allocation and growth phase,” David Hamamoto, chairman of the Lordstown Board CEO Search Committee, said in a statement.
Workers install door hinges to the body shell of a prototype Endurance electric pickup truck on June 21, 2021 at Lordstown Motors assembly plant in Ohio.
Michael Wayland | CNBC
The internal probe was prompted after claims made by short seller Hindenburg Research that Lordstown misled investors. The report prompted investigations by the Justice Department and the Securities and Exchange Commission.
Lordstown went public through a special purpose acquisition company, or SPAC, in October. It is among a growing group of EV start-ups to go public or announce plans to do so with SPACs.
Most of the SPAC deals were initially celebrated by investors, sending shares through the roof and making some founders millionaires, if not billionaires, overnight. But the tides have turned against many of the companies after crackdowns this year by the SEC, including investigations, warnings to investors and potential changes to accounting guidelines.