What happened

Shares of electric pickup start-up Lordstown Motors (RIDE 1.11%) fell 39.1% in March, according to data provided by S&P Global Market Intelligence, following a miserable February with an even worse performance. A well-regarded short seller is raising questions about the company, and investors aren't waiting around to hear the answers.

So what

Hindenburg Research, which in 2020 rocked electric vehicle investors with a devastating report on Nikola (NKLA 0.50%), has turned its attention toward Lordstown. Hindenburg in a mid-March report accused Lordstown of greatly exaggerating the number of preorders for its Endurance electric pickup and padding its fleet orders with companies that don't have the financial capacity to actually one day buy the trucks.

Stock photo of an electric pickup truck.

Image source: Getty Images.

One fleet order for 1,000 trucks, according to Hindenburg, came from a two-person start-up working out of a virtual office. When reached for comment by Hindenburg, the owner of the business acknowledged his company didn't intend to follow up on the order and instead characterized the reservation as a "marketing relationship."

Investors remember what Hindenburg's work did to Nikola. That electric truck company's stock plummeted, and its founder was eventually forced to step away due to the concerns raised in the report. The fear is Lordstown could have a similarly rough road ahead.

Now what

Lordstown CEO Steve Burns seemingly did himself and his company no favors later in the month; during an appearance on CNBC, he seemed to admit Hindenburg is on to something when it comes to its order book.

"We never said we said we had orders," Burns said. "We don't have a product yet, so by definition you can't have orders. I don't think anybody thought we had actual orders."

Truth is we don't yet know what exactly is going on, but splitting hairs after the fact is at least a warning sign. Given the froth we've seen in electric vehicle stocks and the concerns raised by Hindenburg, expect Lordstown shares to find it difficult to get into gear any time soon.