Lordstown Valuation Collapses

Lordstown Motors has dropped into the penny stock world. Its shares trade at $.64. They were $3.50 a year ago. It should not come as a shock. Lordstown has disintegrated financially.

Lordstown recently posted atrocious numbers for both the most recent quarter and most recent fiscal year. Its revenue for both the year and the quarter was $194,000. The annual loss was $387 million. For the quarter, it was $104 million. Part of the fourth quarter figure was asset impairment, which is never good for a manufacturing company.

Chinese manufacturer Foxconn has put money into Lordstown. The management said, “In Q4 2022, we expanded and strengthened our partnership with Foxconn. We converted our prior $100 million joint venture into a direct investment in Lordstown Motors of up to $170 million, $52 million of which was funded in November 2022.” However, some of the Foxconn money is dependent on meeting certain hurdles, which means future funding is in doubt.

If it survives long, Lordstown’s most significant problem is that it builds EV trucks, which have become a hugely competitive part of the electronic vehicle market. The base price of its Endurance is $65,000, a level too high for most pickup customers.

Lordstown has to face the launch of the Tesla Cybertruck, which should launch in a year. The base price is set at less than $40,000. (These are the cheapest electric vehicles you can buy.)

Ford’s F-150 Lightning represents Lordstown’s most significant competition, even though Ford has bumbled its launch. Ford has millions of gas-powered F-150s on the road, which means the Lightning has a bullet in target-market. GM will soon launch an EV version of its successful Silverado, which is usually the second best selling vehicle in America. Ram intends to do the same thing. (These are the most efficient cars on the market.)

Lordstown would need to raise hundreds of millions of dollars – if not more – to play in the market it has to, if it plans to be successful. And, that will not happen.

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