Short Seller Says Lordstown’s Orders Are “Almost Entirely Fake”, Reveals Prototype Caught Fire

Noted short-seller Hindenburg Research has released a damning report about electric pickup truck manufacturer Lordstown Motors.

In the report, Hindenburg Research, which has a short position in Lordstown, claims the company’s order book is “almost entirely fake,” noting that they are not orders but rather non-binding letters of intent that require no reservation fee nor a commitment to actually buy a vehicle. Lordstown claims in January that it had received 100,000 reservations but Hindenberg goes on to allege that some of the orders come from companies with no experience in operating fleets.

An example given is a company by the name of E Squared Energy. This company placed an order for 14,000 trucks in a deal worth $735 million and yet, the company only has two employees. A company by the name of Innervations LLC also placed an order for 1,000 trucks in April 2020, just four months after the company was founded out of a virtual office, while its physical address is simply a UPS store in Hernando, Florida.

It is also alleged that Lordstown paid an outside consulting group to generate preorders for the Endurance pickup truck prior to the company going public in 2020.

Read Also: Ohio Senator Wants Direct-Sales Exemption Made For Lordstown Motors

“Our conversations with former employees, business partners and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy,” Hindenburg adds.

Hindenburg Research also writes that on January 13, 2021, a Lordstown Endurance caught fire 10 minutes after leaving the company’s factory in what was the first road test of the vehicle. Police reports and dashcam video from the police car that attended the blaze confirm the vehicle was destroyed.

Shares in Lordstown fell nearly 20 per cent on Friday after the report was published. Hindenburg Research famously released a similarly damning report on Nikola last year, collapsing its share price also.

Speaking with The Wall Street Journal, Lordstown Motors chief executive Steve Burns said the report contained half-truths and lies, confirming the company will release a detailed response in the coming days.