Lordstown Motors Short Sellers Make Millions As Share Price Whimpers

Brusque sellers betting against Ohio-based electric vehicle manufacturer Lordstown Motors have fabricated significant profits throughout the form of this twelvemonth. Lordstown, which came to the limelight earlier this year subsequently a report from Hindenburg Research declared irregularities, aims to manufacture electric trucks and is known for its partnership with General Motors, which has included the company every bit its Tier 1 supply chain partner. At present, data from S3 Partners reveals that the short sellers had gained $236 million in their bets against the company equally of the start of this month.

Lordstown Motors Loses More Than Half Of Share Cost Value Resulting In Hefty Brusk Seller Gains

Lordstown Motors opened with a share price of $20.38, which was already below its all time high price of $29, which the shares had touched in September concluding year due to investor enthusiasm for its electrical truck. However, the stock went on to lose roughly 30% of this later during the year, and all hopes for recovery were dashed this year, specially in the aftermath of Hindenburg Research's shocking report which saw direction shakeups at the company.

The report had declared that Lordstown'southward first examination for its Endurance pickup truck resulted in the vehicle catching burn, an consequence that the company later confirmed. Still, it refuted other claims by the curt seller, yet the subsequent direction shakeup saw its erstwhile primary executive and chief financial officers, Mr. Steve Burns and Mr. Julio Rodriguez, resign from their roles with the company agreeing not to proceed with legal charges against the pair.

All this drama has affected Lordstown'southward share toll, which is now beneath the levels the stock opened at when the visitor went public through a merger with a special purpose acquisition company (SPAC), DiamondPeak Holdings, in October last yr. The record share toll mentioned above came earlier this merger, as DiamodPeak was already trading on the NASDAQ commutation.

As Lordstown'southward share price touches record lows, its curt interest is reaching new highs, according to S3 Partners. Image: S3 Partners, LLC

The data from S3 Partners suggests that by the end of August, short sellers, who infringe and so sell a company's shares expecting its price to drop, profited by $236 million year to date. These losses grew by roughly $7 million during the week which concluded the previous Friday, particularly since the share toll dropped later making gains during August.

August was a adept month for the shares, which opened at $half dozen.24 at the start of the month and closed at $6.58. Still, this slight proceeds did not deter the brusque sellers, who added a little over 3 meg shares to the total short interest shares for the company past the end of concluding calendar week.

According to S3, while the short involvement shares stood at 30.8 meg in the third calendar week of August, they had risen to stand at 33 million by the end of final week. This increase seems to have served the brusque sellers well, as past noon today, Lordstown's shares were on a downward tendency, maintaining their course shown during this week.

The slight upwards momentum in the shares last month came every bit the company appointed Daniel Ninnivagi equally its replacement for Mr. Burns. Mr. Ninnivagi has formerly served every bit the chief executive of activist investment fund Icahn Enterprises, with industry watchers expecting him tol oversee supply chain and cash menstruum problems at the company. The appointment came afterward the company revealed to the Securities and Substitution Commission (SEC) that information technology had insufficient uppercase to commence production of its electric vehicles in June.

The shorted shares had dropped during mid August as the share toll picked upward but, every bit noted in a higher place, increased again every bit the price dropped during early September.