Lordstown Motors (RIDE 1.74%) has had its share of problems as it has worked toward starting production of its fully electric Endurance pickup truck. In March 2021, a short-seller report questioned the accuracy of the pre-order numbers it claimed, and its ability to begin production on schedule later that year. Some of those claims proved to be accurate.
Fast forward a year, and the company has had to raise additional capital, push back its production plans, replace its CEO and CFO, and shift its strategy to contract out its production. That has all culminated in a share price that has dropped more than 87% in a year, including a crash today after the company reported its most recent financial results.
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The company's fourth-quarter and full-year 2021 financial report contained bits of good news. That included a cash balance of $244 million, which was well above management's own prior expectations. And plans to begin commercial production and sales of its Endurance pickup truck are still on pace to begin in the third quarter of 2022.
With those items of positive news, investors might be wondering if it's a good time to buy Lordstown stock, especially considering how inexpensive the shares have gotten.
But after looking deeper into the company's quarterly report, investors might want to think twice. While Lordstown expects to produce 500 of its electric pickups before the end of this year, it only sees an increase to as many as 2,500 more for 2023. By comparison, electric car start-up Lucid Group started production late in 2021, and it most recently said it expects to produce another 20,000 vehicles in 2022.
That slow ramp up of production may be why Lordstown also said it is continuing to work to raise even more capital to fund its operation. The company may have salvaged its future with its strategic shift to sell a portion of its manufacturing plant and contract production of the Endurance to Foxconn. It is still working to finalize that arrangement, and even expects to expand on it later with a collaboration agreement for new future models.
With a market capitalization down to below $500 million, all the bad news may now be baked into the share price. But with only a moderate amount of revenue expected to come all the way through 2023, investors would likely still be better allocating their capital elsewhere.
