3 min read


The short-seller firm Hindenburg Research, which caused both Nikola and Kandi to stumble down from the high chair, found its next victim: Lordstown Motors.

Hindenburg Research does it again

I'll state this here before you start reading: take all of this with a grain of salt. We don't know the whole truth yet and some of the outcomes we'll only see in time.

The short-seller firm Hindenburg Research, which caused both Nikola and Kandi to stumble down from the high chair, found its next victim: Lordstown Motors. The EV truck maker that so far seemed to be making great progress and I even briefly considered them a smaller sibling of Rivian so far...

To give you the background, this short-seller firm usually acts like this: 1. it takes a short position in an EV company and then 2. puts out a report that has big enough claims to make the stock crumble, through which they 3. profit.

Lordstown ($RIDE) had dropped in value from its all-time-high value of $42.96 on the 4th of Feb already along with the rest of the EV market, but the 'report' that came out last week caused it to fall an additional 15% in the few following days. The stock sits at $15.22 currently, about 64.6% down from its all-time high.

The claims in short (some rephrased):

  • Lordstown has no revenue and no sellable product, misleading investors both on its demand and production capabilities
  • A large part of the claimed 100k pre-orders are fictitious, with examples of a 14k unit deal with a company E Squared that doesn't operate a vehicle fleet at all. Also, most or all pre-orders are non-binding with a $0 reservation payment.
  • A lot of talk about former employees saying how bad things are in the company and production is years away. The CEO, Steve Burns,is described as a con-man.
  • Burns launched Lordstown 4 months after being pushed out of Workhorse
  • The first street road test resulted in the vehicle bursting into flames.
  • Lordstown's executives and directors have unloaded ~$28M in stock since it went public via SPAC in Oct 2020.

Burns: "half-truths and lies"

A spokesperson also said on a statement issued on Friday (link):

We will be sharing a full and thorough statement in the coming days, and when we do we will absolutely be refuting the Hindenburg Research report.

Here's a brief interview with Burns on Monday at their factory (link). Among other things, he promised to have the Beta prototypes coming out in 10 to 12 days, so approximately at the end of next week. Lordstown just shared a video of their factory working too (link).

I'll write a follow-up next week when we have something from Lordstown themselves. Until then, here's my opinion:

Hindenburg's Misaligned incentives

We do need people that call out the wrongdoings and deceptions. But consider this:

So, although the claims are big and seem to ring true at least in parts, not all of it is doomsday-material. Only the part, if proved, where the company lies is bad. Every manufacturer will have troubles along the way and it is to be expected. If you ask certain 'former employees' of any bigger company, there will be some that say the company is dead soon. Remember the average news of Tesla a few years back?

All I know is that we've got time. And time is all we need to see if Lordstown Motors makes it or not. I sure hope they do.

Enjoying these posts? Subscribe for more