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Lordstown Motors executives sold shares before reporting financial problems

A top executive at Lordstown Motors, a confused electric truck startup, sold millions of dollars in the company’s stock earlier this year before reporting its financial results and revealing the company’s troubles.

Five executives, including Lordstown’s president and former CFO, sold more than $ 8 million in shares in the first three days of February, according to initial filings. Report by The Wall Street Journal..

One of the company’s executives, Chuan Vo, sold more than 99% of his vested interests on February 2, making more than $ 2.5 million in profits, Filing said.

Former Tesla executive President Rich Schmidt, who joined Lordstown in 2019, sold nearly half (39%) of the company’s stake on February 2 and 3 for $ 4.6 million, Filing said. I will.

A Lordstown spokesman, released in October, told the journal that Schmidt used a portion of his earnings to expand his turkey hunting farm in Tennessee.

Chuanvo, an executive at Lordstown Motors, sold more than 99 percent of his vested interests before the financial problems were reported.
Chuanvo, an executive at Lordstown Motors, sold more than 99 percent of his vested interests before the financial problems were reported.
MEGAN JELINGER / AFP via Getty Images

Between February 2nd and 4th, three other executives, including former CFO Julio Rodríguez, who suddenly resigned last week, sold a small holding worth $ 250,000 to $ 400,000. And additional filings show.

These sales were disappointing for the full year 2020, and the company told investors. Question from the Securities and Exchange Commission..

Since then, the company’s situation has snowballed. Sudden resignation of CEO and CFO, And the company recently warned You may not have enough cash to stay open for much longer..

Inventories have dropped significantly since the sale in February. Lastly, it was seen trading at just over $ 10 per share, down from more than $ 30 per share in mid-February.

Securities lawyers, accountants and analysts who spoke to the journal said sales were particularly unusual as sales were generated after the end of the last quarter and before the results were announced.

Most listed companies have a so-called blackout period around the time the Rosetown deal occurs. During this period, executives are prohibited from trading stocks.

In addition, executives sold a significant portion of the company’s shares shortly after it went public in October after the SPAC merger. Questions were raised about confidence in the viability of a two-year-old startup.

“At best, it suggests that the company has weak internal control over executive transactions,” said Daniel Taylor, a professor of forensic analysis at the Wharton School of the University of Pennsylvania.

Former President Donald Trump will meet with co-founder and former CEO of Lordstown Motors.
President Donald Trump will meet with Lordstown Motors co-founder and former CEO.
Tasoska Topodis / Getty Images

When asked for comment, a Lordstown representative pointed out a statement issued last week summarizing the findings of a special committee formed by the company to investigate the allegations. Made for it by short-selling Hindenburg Research..

In that statement, the Special Committee acknowledged that “certain Lordstown Motors directors and executives have sold or transferred our shares.”

“Such directors and executives each held substantial shares in Lordstown Motors in the form of shares and options following the sale and transfer described in our public documents,” the company said. Added.

Nate Anderson, founder of Hindenburg Research, commented on Twitter about the sale of shares in Rich Schmidt, president of Lordstown. This is a mockery of the turkey hunting farm.



Lordstown Motors executives sold shares before reporting financial problems

Source link Lordstown Motors executives sold shares before reporting financial problems

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