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Lordstown Motors: Why did the company's CEO and CFO resign?

The startup Lordstown Motors Corp. announced today the sudden departure of CEO Steve Burns, and CFO (CFO) Julio Rodriguez, a few days after the electric truck manufacturer warned that he may not have enough money to continue his business next year. The company's share price plummeted drop after the departure of the two executives.

"We thank Steve Burns for his passion and commitment to the company", said the startup.

The resignations of the two executives come as the company's board of directors reported conclusions from internal research on allegations made by Hindenburg. Burns is Lordstown's largest shareholder, with more than 26%, according to its data Refinitiv.

Lordstown acknowledged that it had overestimated the quality of pre-orders for its electric trucks, but dismissed as false Hindenburg's allegations that it had overestimated the viability of its technology and misled investors about production plans.

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Lordstown Motors: CEO CFO company resigns
Lordstown Motors: Resignations of the company's CEO and CFO

When it announced its reverse merger publication agreement last August, Lordstown said it had pre-orders for Endurance endurance truck worth about $ 1,4 billion. After Hindenburg accused the company of misleading investors about pre-orders, Lordstown said it has not had binding orders since.

The company has appointed the chief independent director, Angela Strand, executive chairman to oversee the company's transition, until the appointment of a permanent CEO.

"We are committed to achieving production and commercialization goals", Strand said in a statement.

The 52-year-old Strand is the CEO of a consulting firm specializing in technology and business strategy, and has worked with fleets and fleet management companies, the types of clients that Lordstown aims to win after Endurance production is scheduled to begin production in September.

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Lordstown Motors Resignations CEO CFO company
Lordstown Motors: Resignations of the company's CEO and CFO

Lordstown has revealed that customer deliveries will not begin until the first quarter of 2022.

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In addition, Becky Roof, who has previously served as a temporary CFO at several companies, including Eastman Kodak (KODK.N) and Hudson's Bay Co, has been named Lordstown's temporary CFO with immediate effect.

Lordstown also revealed in a regulatory filing that it had hired a unit AlixPartners, a consulting firm known for assisting companies in restructuring their operations.

Since the warning of continuing concern last week and the free fall in its share price, the company has tried to allay some concerns, saying it was in talks with several companies to raise funds.

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