Steven Burns, Founder and former Chief Executive of Lordstown Motors (NASDAQ:RIDE) has abandoned RIDE stock. According to a recently released regulatory disclosure, Burns has offloaded his entire holdings in his former company across three transactions between May and June.
This isn’t terribly surprising as Lordstown has been something of a cautionary tale the past few years, even despite the company’s best efforts to remain relevant. Just last month, the electric vehicle (EV) maker initiated a reverse stock split in order to regain compliance with the Nasdaq’s $1 minimum bid price requirement. Unfortunately, since the stock split, the company has only continued its downward slide.
Interestingly, Burns sold about half his stake in the company prior to the reverse stock split and the other half post-split. On May 23, the day before the reverse stock split, the former CEO sold off 581,000 shares for 27 cents a share. The very next day, after the split, Burns sold an additional 200,000 shares for $3.74 each. On June 16, Burns abandoned his remaining 591,752 shares for $4.99 each.
RIDE Stock Sinks Following Founder’s Stock Sale
It seems Burns’ sale has rung sour for Lordstown Motors investors. RIDE stock is down more than 5% heading to market close. RIDE is down about 80% year-to-date. Despite the company’s recent split, concerns remain over the EV maker’s ability to trade above the $1 minimum, even just following its reverse stock split.
In May, the EV maker issued a notice that it may be forced to file bankruptcy when Foxconn (OTCMKTS:HNHPF) attempted to back out of its $170 million investment agreement.
It’s unlikely Burns’ recently published stock sales inspire confidence in investors, either.
If you recall, Burns resigned from the Chief Executive role alongside then-Chief Financial Officer Julio Rodriquez following an internal investigation into the company in response to claims made by Hindenburg Research, a notorious short-seller. In a scathing report, Hindenburg accused Lordstown of grossly overstating its pre-order numbers for its in-production electric trucks, a point Lordstown has acknowledged as true.
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On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
