Lordstown Motors (NASDAQ:RIDE) has announced intentions to take legal action over Foxconn’s alleged failure to honor an agreement to buy around 10% of Lordstown’s Class A common stock. According to an SEC filing, Foxconn disputes their commitment to complete the transaction, citing their interpretation of the Investment Agreement, which, they claim, doesn’t allow for adjustments in the number of shares to be purchased following Lordstown’s recent reverse stock split.
Lordstown Motors appears pessimistic about Foxconn fulfilling its obligation, citing what it deems to be a pattern of bad faith and breaches of the Investment Agreement that have caused significant damage to the company. Lordstown has warned that unless a swift resolution is reached, it will resort to litigation. On a brighter note, the company mentioned that its reverse stock split has helped it maintain its listing status with Nasdaq, having received written confirmation of its good standing from the exchange earlier in the week.
RIDE stock has had a difficult time recently, as it continues to steadily trend down. Indeed, it has shed over 74% of its value in the past three months, as indicated by the graphic above.
