Lordstown Falls After Confirming Federal Regulator Probes (1)

Lordstown Motors Corp. shares fell after the troubled startup confirmed regulators are investigating its claims about potential sales of its debut electric vehicle.

The probe, which has been previously reported, is the latest woe to beset the company after an internal probe last month concluded it had misstated preorders for its planned Endurance pickup truck. Lordstown shares fell 3.9% Friday to $8.54.

Separately, Bank of America Corp. analyst John Murphy cut the price target on Lordstown to $11 a share from $13, with a lower valuation multiple than what he gives to peers Fisker Inc. and Canoo Inc.

Lordstown’s downside risks include inability to convert non-binding pre-orders into sales and increased scrutiny on the company and management team, according to the Bank of America’s research note on the auto industry published on Friday.

Lordstown, which acquired a defunct General Motors Co. plant in Ohio in 2019, has been trying to get its electric pickups into production by September. The company went public in November through a merger with special purpose acquisition company DiamondPeak Holdings that netted the startup $675 million.

In a regulatory filing Thursday, the company disclosed it has received two subpoenas from the Securities and Exchange Commission regarding the merger with the blank-check company and pre-orders for its EV truck. It has also been informed by the U.S. Attorney’s Office for the Southern District of New York about the investigation of these matters.

“We have cooperated, and will continue to cooperate, with these and any other regulatory or governmental investigations and inquiries,” the company said in the filing.

Lordstown ousted its founder and Chief Executive Officer Steve Burns and his hand-picked finance chief, Julio Rodriguez, in June after the company’s board released the results of its own investigation.

(Updates with closing share price, research note beginning in second paragraph)

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Yueqi Yang in New York at yyang492@bloomberg.net

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Chester Dawson at cdawson54@bloomberg.net

Richard Clough

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