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Hindenburg Research, the short-seller that accused Nikola of “intricate fraud” and unraveled its deal with General Motors, is taking aim at another electric-vehicle startup.
The firm said Friday it is taking a short position in Lordstown Motors, accusing the company of pumping up preorder numbers to generate investor interest in a lengthy report. Like many EV startups, Lordstown went public through a special-purpose acquisition company in October.
Shares of Lordstown were down nearly 17% as of Friday afternoon.
“Lordstown is an electric vehicle SPAC with no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities,” Hindenburg said in its report titled “The Lordstown Motors Mirage.”
Lordstown did not immediately return Insider’s request for comment.
Lordstown was founded in 2018 and plans to produce a commercial pickup truck for fleet use, the Endurance, at a shuttered GM plant in Lordstown, Ohio. One of Hindenburg’s key accusations is that, although Lordstown has said it has 100,000 preorders, few of those customers actually plan on buying a truck.
“Our conversations with former employees, business partners, and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy,” the short-seller said.
Hindenburg detailed conversations with multiple Lordstown preorder holders who said they don’t intend to follow through. One business owner who signed up for a 1,000-truck order said they won’t actually order any vehicles and described the preorder as a marketing relationship, according to Hindenburg.
Lordstown CEO Steve Burns pushed back against the claims in a statement to Bloomberg, saying “we always stated that pre-orders were non-binding. That is what pre-orders are.”
The short-seller also alleges that Lordstown is much further away from production than it says. It cites a former employee who estimates that production will start in three to four years, rather than by September, as Lordstown says.
Former employees also told Hindenburg that Lordstown “has completed none of its needed testing or validation, including cold weather testing, durability testing, and Federal Motor Vehicle Safety Standards testing required by the NHTSA.”
In September 2020, Hindenburg published a report accusing Nikola and its founder, Trevor Milton, of fraud. In the aftermath of the accusations, Milton departed the company and a major deal with GM fell through.
Nikola denied most of the allegations but said in February that it had determined that Milton made several inaccurate statements following an internal investigation.
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