Lordstown Motors said Monday that CEO Steve Burns and CFO Julio Rodriguez have resigned, days after the electric truck maker warned that it had “substantial doubt” about its ability to continue as a going concern in the next year.
Shares of Lordstown, which went public through a special purpose acquisition company, or SPAC, in October, slid by about 13 percent during premarket trading.
Lordstown said its lead independent director, Angela Strand, has been appointed executive chairwoman and would oversee the firm’s transition until a permanent CEO is identified. The company named Becky Roof as interim CFO effective immediately.
The resignations come amid an internal investigation of the company’s operations into claims by short-seller Hindenburg Research that it misled investors. The U.S. Securities and Exchange Commission has opened an inquiry looking at Hindenburg’s claims as well as the company’s merger with SPAC DiamondPeak Holdings.
Hindenburg accused Lordstown in a March report of using “fake” orders to raise capital for its Endurance electric pickup. The short seller said the pickup was years away from production; however, Lordstown has maintained it’s on track to start making the vehicle in September.
The resignations are the latest blows to Ohio-based Lordstown, which attracted interest after General Motors pulled the plug on its sedan plant in Lordstown, in northeast Ohio, almost two years ago, eliminating more than 1,300 jobs and creating a headache for the local economy that depended on the factory, drawing the ire of former President Donald Trump.
Lordstown Motors bought the assembly plant, and said it hoped to employ more people than its predecessor by the end of 2021. The company aimed to manufacture Endurance, an all-electric pickup.
Shares of the aspiring automaker are down more than 40 percent this year. Its market cap is about $2 billion.
Lordstown is among a growing group of electric vehicle start-ups going public through deals with SPACs, which have become a popular way of raising money on Wall Street because they have a more streamlined regulatory process than traditional initial public offerings.
The company is scheduled to host media, investors, analysts and others next week at its plant, a former General Motors facility, in Ohio. Strand said those plans remain in place.
“We remain committed to delivering on our production and commercialization objectives, holding ourselves to the highest standards of operation and performance and creating value for shareholders,” she said in a statement. “Along with the management team, I will continue to work closely with them and the Board to execute on Lordstown’s vision for the future of electrified transportation.”
Burns is the latest high-profile executive of a SPAC-backed automotive company to resign. Nikola Chairman Trevor Milton, who served as CEO ahead of the company’s June 2020 IPO, resigned last year amid SEC inquires following a separate Hindenburg Research report that accused Milton and the company of misleading investors.