reported fourth-quarter figures Wednesday night. However, profits don’t matter much, as the electric truck maker still doesn’t sell anything. But spending does, and that’s what investors are paying attention to, especially after a tough few days for stocks.
Lordstown (ticker: RIDE) expects to spend about $ 250 million to $ 275 million this year on capital equipment, to get the plant it bought from General Motors (GM) ready to produce its all-electric pickup called Endurance. The company also expects to spend another $ 220 million on expenses. That would leave Lordstown with around $ 200 million by the end of 2021.
Spending appears higher than Wall Street expected, based on projections added by Bloomberg. Higher-than-expected cash outflows will likely put pressure on stocks on Thursday. The shares fell 3.8% in after-hours trading.
Still, it’s hard to say exactly what will happen to the stock price. The shares are already down 15% since Friday, when a short seller released a negative research report on Lordstown. Hindenburg Research argued that the company’s order book is not as strong as investors believe. Lordstown reports more than 100,000 pre-orders for its electric truck.
The company issued a brief statement on Monday, saying only that management was aware of the report and would respond in due course. Lordstown also said, and repeated in its earnings release Wednesday, that it is on track to begin producing the Endurance in September.
Management spoke a bit more about the short seller’s report on the earnings conference call. “We have also received a request for information from the SEC and are cooperating with that inquiry,” said CEO Steve Burns. “In addition, the Board of Directors has formed a special committee to review these matters.”
Investors will have to wait for more clarity on the issues raised in the negative report. Until then, they will follow the Endurance development timeline.
Write Al Root at [email protected]