YOUNGSTOWN, Ohio – V Lordstown Motors Corp. A fourth class action lawsuit was filed alleging the company misled investors about pre-ordering its all-electric endurance pickup truck.
The filing follows three previous class action lawsuits filed here in the U.S. District Court following a March 12 claims report by short seller Hindenburg Research.
According to the latest lawsuit, investor Jesse Brury claims that it acquired shares in Lordstown Motors at “artificially inflated prices” between August 3, 2020 and March 17, 2021. The complaint, as in previous lawsuits, alleges that Lordstown Motors and certain executives made “materially false and misleading statements regarding the company’s business”.
Specifically, the lawsuit states that Lordstown Motors failed to disclose that the company’s pre-orders were non-binding and that many potential customers did not have the means to purchase the vehicle.
The lawsuit named Lordstown Motors, its CEO Steve Burns, President Rich Schmidt and CFO Julio Rodriguez as defendants.
Many of the allegations stem from the Hindenburg report alleging that Lordstown Motors and some of its executives misrepresented non-binding letters of intent as “pre-orders” for Endurance pickup. The report also claims the company is way behind schedule in producing the vehicle.
“The company has consistently pointed to its order book of 100,000 pre-orders in order to demonstrate the great demand for its planned EV truck,” says the report. “Our discussions with former employees, business partners and a comprehensive document review show that the company’s orders are largely fictitious and serve as a support for raising capital and lending legitimacy.”
Burns has since said the company has always disclosed that pre-orders are non-binding.
Earlier this month, Lordstown Motors unveiled the first two beta models of the Endurance, which will be used for safety validation and crash testing. The Endurance is billed as the world’s first fully electric commercial pickup.
Lordstown Motors’ Burns said the company is on track to start full production of the vehicle by the end of September. The CEO said the company plans to hire up to 1,500 employees once production is in full swing.
Copyright 2021 The Business Journal, Youngstown, Ohio.