What happened
Shares of Electric Last Mile Solutions (ELMS 1300.00%), the electric delivery van company and recent SPAC IPO, skidded off the road Wednesday morning after the company announced simultaneous resignations of both its Chairman Jason Luo and its CEO James Taylor.
As of 11:45 a.m. ET, Electric Last Mile stock is down a whopping 37.1%
Image source: Getty Images.
So what
Electric Last Mile advised today that "James Taylor ... has resigned from his role as Chief Executive Officer and Jason Luo ... has also resigned from his position as Executive Chairman of the Board."
The company noted that an investigation conducted by a special committee of its board of directors preceded both departures. This investigation concluded that both Luo and Taylor "purchased equity in the company at substantial discounts to market value without obtaining an independent valuation" just prior to the company making public its decision to reverse-merge into the Forum Merger III Corporation SPAC -- the event that permitted Electric Last Mile to execute a de facto IPO.
Now what
That's an SEC no-no, and now it has cost both execs their jobs. Shauna McIntyre, a Ford alumna and the former CEO of LiDAR company Sense Photonics, will take over as interim chief executive officer. Brian Krzanich, current CEO of software company CDK Global, has been appointed non-executive chairman of the board.
Additionally, Electric Last Mile noted today that "on January 26, 2022, on the basis of the special committee investigation, the board concluded that the company's previously issued consolidated financial statements [as far back as fiscal 2020] should be restated and, therefore, should no longer be relied upon."
Electric Last Mile will now have to go back and check all its math for the past couple of years before it can provide accurate information. Judging from today's price action, however, it appears few investors are interested in waiting around to hear any more bad news.