Electric vehicle maker Lordstown Motors (RIDE) is looking to raise money to finance its operations, according to a Reuters report citing the company’s executive chairwoman, Angela Strand. Lordstown stock fell 5.45% on Monday to close at $10.07.
Lordstown is focused on manufacturing electric trucks and has an assembly plant at a former General Motors factory in Ohio. But the company faces a funding shortage and has warned that it needs to raise cash to continue as a going concern. In an effort to address its money problems, Lordstown is evaluating strategic partners, according to the Reuters report.
Additionally, the company is pursuing a loan from the government through the Energy Department. It previously revealed seeking $200 million under the government’s Advanced Technology Vehicles Manufacturing loan program.
As it seeks funding, Lordstown is also searching for a new CEO after the resignation of Steve Burns, together with the Chief Financial Officer (CFO). Before his departure, former CEO Burns said Lordstown would produce fewer units of its Endurance truck in 2021 than it had previously targeted. (See Lordstown stock chart on TipRanks).
R.F. Lafferty analyst Jaime Perez downgraded Lordstown Motors stock to Sell from Hold and cut the price target to $3 from $6. The analyst’s new price target implies 70.21% downside potential.
“With the level of uncertainty increasing in the future of Lordstown, we find it prudent to lower our rating to Sell,” noted Perez.
Consensus among analysts is a Moderate Sell based on 1 Buy, 3 Holds, and 4 Sells. The average Lordstown analyst price target of $9 implies 10.63% downside potential to current levels.
RIDE scores a 1 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to underperform market averages.
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