Lordstown Motors (RIDE 5.97%) hasn't had many good days on the stock market in the last year. Its shares are down about 80% in the last 12 months. But its investors got some welcome news Tuesday, and Lordstown closed the session up by 5.8%.
The company announced a management shakeup, signaling to investors that it is ready to move closer to the commercialization stage of the business. President Edward Hightower is taking on the additional role of CEO, while Daniel Ninivaggi, the former holder of that title, is becoming executive chairman of the board. Lordstown also named former Ford executive Donna Bell as executive vice president of product creation, engineering, and supply chain.
The stock may also have jumped in sympathy with another EV start-up that more than doubled earlier in Tuesday's session on company-specific news. Like Lordstown, Canoo has struggled, and its viability has been in question. But a newly announced deal had Canoo stock soaring, and investors may feel Lordstown could end up on a similar path.
Lordstown has finalized an asset purchase agreement with manufacturer Foxconn and has started a development partnership with it. Foxconn is taking over most of Lordstown's manufacturing facility and will be building its Endurance electric pickup truck. Lordstown expects to have the initial 500 units built with commercial deliveries underway by the end of 2022.
While Hightower leads the company's development efforts with Foxconn, as executive chairman, Ninivaggi will focus on "strategic and financial matters." This will likely include raising more capital for the company. As of March 31, Lordstown had a little over $200 million in cash and cash equivalents on the books after it used nearly $70 million in cash in the first quarter.
The risks for Lordstown's shareholders haven't gone away. But the stock was reacting positively to the changes as the company moves to get production underway.