Shares of embattled electric pickup start-up Lordstown Motors (NASDAQ:RIDE) were trading higher on Thursday. There was no bullish news moving the stock higher -- and in fact, there are some good reasons to think that the stock really shouldn't be moving higher.
Nonetheless, as of 1:30 p.m. EDT today, Lordstown's shares were up about 8.7% from Wednesday's closing price.
I admit that I don't understand why auto investors would be buying Lordstown's stock at these levels. This company's bull case (such as it was) has been badly damaged in recent months. Let's review:
- In March, short-seller Hindenburg Research alleged that Lordstown (among other things) exaggerated the number of pre-orders it had for its Endurance pickup truck. Lordstown denied the allegations, but the Securities and Exchange Commission opened an investigation.
- In May, Ford Motor Company (NYSE:F) unveiled its battery-electric F-150 Lightning, coming next year with performance and features that outpace the Endurance -- at a starting price that is over $10,000 lower.
- On June 8, the company filed a revised version of its annual report with the SEC, in which it had added (presumably at the direction of its auditors) a so-called "going concern" notice. The notice is a warning to investors that the company might not have enough cash to survive for another year.
- On the following Monday, June 14, Lordstown's independent directors said that their investigation had found that Hindenburg's allegation about its pre-orders was true -- and that CEO Steve Burns and CFO Julio Rodriguez had resigned, effective immediately.
- On July 2, The Wall Street Journal reported that the U.S. Department of Justice has opened an investigation into the company.
Get the idea? There's not much left here.
Look, I understand why Lordstown's stock made a big splash when the company went public amid last year's SPAC frenzy. Here, the story went, is an electric-truck maker with a factory, some level of support from General Motors (NYSE:GM), and thousands of pre-orders for a truck designed around the needs of an important (and likely early-adopting) market segment: commercial fleet operators.
It all sounded good, at least to those who didn't understand the dynamics of the U.S. market for commercial-fleet pickups (which is dominated by Ford and GM, both of which have long-standing relationships with fleet customers and extensive service networks already in place).
But there's not much left of that story, and to the extent that Lordstown had a window to launch its pickup and gain some market share before Ford and GM and Stellantis' Ram got moving on their electric trucks, that window seems to have closed. Trade carefully.