CLEVELAND (AP) — The failure of an Ohio-based electric truck startup to pay $570,000 in real estate taxes due in early March is yet another troubling sign for a company that has been barraged by bad news this year.
Lordstown Motors Corp. stock has plummeted from nearly $31 a share on Feb. 11 to just over $10 on Tuesday in the wake of a U.S. Securities and Exchange Commission inquiry and the filing of four potential class-action lawsuits by investors who claim they have been defrauded.
The company appeared to be primed for success last June during a showcase event at the massive former GM plant outside Youngstown, Ohio. Then-Vice President Mike Pence sat in the passenger seat of an Endurance prototype as it rolled onto a stage to hearty applause. Noisy, colorfully lit robots building nothing gyrated nearby.
The first drip of bad news came in January when an Endurance pickup truck prototype caught fire 10 minutes into its initial test drive in Michigan. A company spokesperson issued a statement afterward saying, "No one was hurt, and like all of our test findings, we do it to create a great product." Spokesperson Ryan Hallet said Tuesday the non-payment, initially reported by the Tribune Chronicle in Warren, was an "unfortunate administrative error" and that the company is in the process of paying the taxes and a 10 percent penalty of around $57,000.
Company officials announced in January it had received more than 100,000 pre-orders for the Endurance and production was scheduled to begin this September, which critics claim is untrue. Lordstown Motors CEO Steve Burns acknowledged during an earnings call in March that the SEC was conducting an inquiry based on a lengthy and hyper-critical report by the investment firm Hindenburg Research, which holds a short position on Lordstown Motors stock.
The shareholder lawsuits filed in federal court in Youngstown are largely based on the Hindenburg Research report, which says Lordstown Motors has "no revenue and no sellable product" and has "misled investors on both its demand and production capabilities."
The report and lawsuits say production of the Endurance is three to four years away based on information provided by a former employee. Investors, business partners and former employees contend "the company's orders are largely fictitious and used as a prop to raise capital and confer legitimacy," one of the lawsuits claims.
A $735 million deal for 14,000 trucks the company announced earlier this year involved a purported buyer that doesn't operate a vehicle fleet and is based out of a small apartment building in Texas, according to the Hindenburg report.