EV Startups Lordstown, Arrival Sell Off Ahead Of Earnings Reports

Lordstown Motors (RIDE) will report second-quarter earnings late Wednesday while rival electric-vehicle maker Arrival (ARVL) will report early Thursday. RIDE stock and ARVL stock fell.


Lordstown Earnings

Analysts polled by FactSet expect Lordstown to post a loss of 49 cents a share on zero revenue.

In a move that casts doubt on Lordstown’s future, early investor Workhorse Group (WKHS) said on Aug. 10 that it had sold most of its stake in Lordstown. Workhorse has sold 11.9 million shares since July 1, reducing its 10% stake in the Ohio-based company by two-thirds.

However, in a July 26 SEC filing, Lordstown said it had secured a deal in which hedge fund YA II would buy up to $400 million in equity of the company. 

After the last earnings call, Lordstown said it was pushing back the start of production of its electric pickup Endurance to late September. Management also said production would be limited and at best be 50% of prior its expectations.

Since then, many top managers have left the embattled company. And Lordstown on June 8 told investors that it didn’t have enough cash on hand to start commercial production and sales of the Endurance and signaled it might go out of business if it didn’t secure more funding. 

However, a week later, the company said it had enough money to begin production and expected to build between 15,000 and 20,000 trucks through May of 2022.

In May, short seller Hindenburg Research claimed Lordstown misled investors with false order numbers, among other things, to raise capital for its Endurance electric pickup. The Hindenburg report also said the pickup was years away from production. 

Arrival Earnings

Analysts expect British-American light commercial EV maker Arrival to post a loss of 5 cents a share on zero revenue.

Arrival says it has four EVs in development: a bus, a van, a large van and a small vehicle platform. Start of production of the bus is planned for the last quarter of 2021.

Arrival claims that its electric vehicles are the first EVs that cost the same as gas- and diesel-powered equivalents. The company says it has created an electric-vehicle platform that can be scaled to make many variants in multiple vehicle categories.

The company announced in May that it is partnering with Uber (UBER) to develop the Arrival Car, with production expected in Q3 2023.

Lordstown, Arrival Stock

RIDE stock fell 3.3% to 5.63 on the stock market today. Shares are well off their 52-week high 31.80, achieved in September 2020. RIDE stock is trading well below its 50-day line, according to MarketSmith chart analysis.

Lordstown’s relative strength line is sliding and at all-time lows.

Meanwhile, ARVL stock sank 7% to 12.65. ARVL stock has lost two-thirds of its value since hitting a high of 37.18 intraday on Dec. 7, 2020. Arrival’s relative strength line is ticking up after notching all-time lows.

WKHS dropped 4.5% and UBER was down 2.5%.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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