Lordstown (RIDE) $10M Investor Settlement
Lordstown Motors ($RIDE) decided to settle up to $10M with investors to end claims related to Hindenburg's investigation and Endurance issues.
Outline:
In 2021, Hindenburg Research published a report on Lordstown Motors. The key points of this research were that the company fabricated pre-orders and faced issues with the Endurance prototype. Following this news, $RIDE significantly fell, and Lordstown faced a lawsuit from investors.
Timeline:
On March 12, 2021: Hindenburg Research published a report on Lordstown Motors titled "The Lordstown Motors Mirage: Fake Orders, Undisclosed Production Hurdles, and a Prototype Inferno".
Following this news, $RIDE fell over 16% the same day.
On March 17, 2021: Lordstown Motors' CEO disclosed an SEC inquiry during an earnings call.
After that, $RIDE fell over 13% the next day.
On March 18, 2021: $RIDE stockholder filed a claim against Lordstown based on all these undisclosed issues.
Background:
Hindenburg announced that it had taken a short position on Lordstown Motors, saying the company had “no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities.”
Hindenburg also stated that “extensive research reveals that the company’s orders appear largely fictitious and used as a prop to raise capital and confer legitimacy.”
Further, the report included photos and a 911 call about a Lordstown prototype catching fire during a test drive.
There was also claimed that CEO Steve Burns paid consultants for truck pre-orders since 2016 while at Workhorse.
In response to the Wall Street Journal, Burns called the report “half-truths and lies” and accused Hindenburg of trying to damage the stock before their first earnings report.
After all that, Burns announced during their first earnings call that the company is complying with an SEC request and has formed a committee to review Hindenburg’s claims.
What can investors expect now?
Lordstown Motors recently decided to resolve the suit and settle up to $10M with investors to end claims related to Hindenburg's investigation and Endurance issues.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.
Frequently Asked Questions
All persons, who purchased or otherwise acquired Lordstown's publicly traded Class A Common Stock, Warrants, Units, or Options to purchase or sell Lordstown's publicly traded Class A Common Stock from August 3, 2020, through July 2, 2021, or held Lordstown’s publicly traded Class A Common Stock on September 21, 2020, and were damaged thereby.
No, if you have purchased securities within the class period, you are eligible to participate.
You can participate in the settlement and retain (or sell) your securities.
The final payout amount depends on your specific trades and the number of investors participating in the settlement.
If 100% of investors file their claims - the average payout will be $0.045 per share. Although typically only 25% of investors file claims, in this case, the average recovery will be $0.18 per share.
The entire process usually takes 4 to 9 months after the claim deadline. But the exact timing depends on the court and settlement administration.
11thestate is an investor recovery company, we help investors to track and collect securities class action settlements. We will:
Prepare documents for your payout
Audit the claim and make sure you get the maximum possible payout
File a claim with the settlement administration
Correspond with the settlement administration to resolve emerging issues
Deliver payout directly to your brokerage account
There is no upfront cost, but we will deduct 20% of the recovered amount as a commission for our services.