Running out of cash and unable to find a suitable partner, Lordstown Motors anticipates ending the production of its Endurance pickup trucks unless it can find additional capital. After its stock consistently traded below $1 per share for a continuous stretch of 30 trading days, Lordstown Motors received a delisting notice from NASDAQ, violating the terms of its investment deal with Foxconn, a Taiwanese manufacturer and service provider. The automaker cited difficulties in raising capital in a competitive market environment as the reasons for its financial failures. It reported a net loss of $171.1 million in this year’s first quarter compared to last year’s loss of $89.6 million. Originally a part of the many EV-related companies going public between 2020 and 2021, Lordstown was seen as ahead of the curve due to the massive assembly plant it purchased from General Motors. However, in addition to failing to achieve the overblown claims presented to investors, stiff competition from the F-150 Lightning pickup truck contributed to the Lordstown stock dropping to a mere 36 cents.
Complex Terms:
- Delisting: To remove a stock from the official register of a stock exchange
- Nasdaq: An American stock exchange based in New York City
- Automaker: A company that makes cars
- Overblown: Excessively inflated
- Investors: A person or organization that puts money into financial plans, property, etc. with the expectation of achieving a profit
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