Manufacturer of electric vehicles
issued a warning about an operating entity in its quarterly financial statements. This has a stock at the end of trading on Tuesday.
Shares fell more than 30% from the daily highs at the end of trading. Shares closed more than 16% during the day. The
Dow Jones Industrial Average,
for comparison, I finished the day roughly.
Lordstown management (ticker: RIDE) said it would need more money to commercialize its EV truck, called Endurance. They just need more money to get to the point where they can make money.
“These conditions raise significant doubts about our ability to continue to operate for at least one year from the date of issue of these unaudited consolidated consolidated financial statements,” the quarterly report said.
The warning for a going concern is important. “An opinion on a going concern is justified when there is significant doubt that the company can continue to operate normally in the foreseeable future without having to liquidate part of its assets and / or restructure its liabilities,” said the accounting expert. Robert Willians To Barron.
In practice, for investors, this means that stocks can decline significantly. Without the infusion of much-needed funds, existing shareholders can be destroyed.
Lordstown did not immediately respond to a request for comment on the language of his submission.
The quarterly declaration was delayed and Lordstown announced last Friday that it had received notice from the Nasdaq of a potential delisting due to the late filing. Companies must maintain regular financial statements in order to be listed on major exchanges.
Lordstown shares have been overtaken by other meme shares, which are shares of severely shortened companies that appear on social media sites, encouraging retailers to buy. About 31% of Lordstown’s marketable shares were borrowed and sold briefly by bearish investors betting on falling prices. This is approximately five times the average short-term interest in other small-cap stocks. Meme traders target stocks with high short interest, as a rapidly rising price can force short sellers to cover, leading to a rise in stocks.
This was difficult for Lordstown investors. Entering trading on Tuesday, the shares fell by about 33% during the year so far.
Write to Al Root at email@example.com