Stephen Burns, founder and former CEO of Lordstown Motors, sold his entire stake in the EV maker. The sale was outlined in a regulatory filing.
Burns’ sale of his Lordstown stake was made in three transactions in May and June. About 581,000 shares were sold May 23, just before the company initiated a reverse stock split for an average price of $0.27 per share. Another 200,000 shares were sold for an average price of $3.74 per share May 24, and the last 591,752 shares were sold at $4.99 per share June 16, according to a Bloomberg News report.
Lordstown implemented the reverse stock split in May to comply with Nasdaq’s minimum $1 listing requirement, a move seen as an attempt to appease investor Foxconn. Reports suggested Foxconn threatened to pull about $170 million worth of funding from the cash-strapped startup.
Lordstown later announced it was looking to file legal action against the Taiwanese company to ensure the firm’s planned purchase of almost 10% of the EV maker’s shares was not canceled. “The company believes that Foxconn’s various breaches of the investment agreement and pattern of bad faith have caused material and irreparable harm to the company,” Lordstown said.
Burns resigned from his role as Lordstown’s CEO in 2021 alongside then-CFO Julio Rodriguez. The departures came following an internal investigation by the company board about claims made by forensic financial research firm Hindenburg Research.
Prior to its fall from grace, Lordstown seemed like it had a shot at becoming a contender in the U.S. all-electric pickup truck market. The company declared it had secured 100,000 pre-orders for its Endurance pickup truck from prospective customers, a claim challenged by Hindenburg. Lordstown acknowledged it had overstated pre-orders for the Endurance, as noted in a Reuters report, but the company maintained it had not misled investors about its production plans and the potential of its technology.
The initial production of the Lordstown Endurance pickup truck started in September 2022, but it was halted in February. Recalls were added to the company’s challenges, and more recently, the Endurance was also given a 174-mile range estimate from the EPA, shockingly low considering the Endurance’s 109 kWh battery pack.