Lordstown shares plunge 48% as investor Foxconn alleges agreement breach
Lordstown Motors (RIDE.O) shares plunged 48% Monday after major shareholder Foxconn alleged it breached their $170 million investment deal and the electric truck maker warned it might be forced to file for bankruptcy.
Lordstown warned in a U.S. Securities and Exchange Commission filing on Monday that “there is substantial doubt regarding our ability to continue as a going concern.” Without a resolution with Foxconn, other funding or new partners, it could be forced to file for bankruptcy or cease operations, it added.
Lordstown said it was in talks with the Taiwanese contract manufacturer to seek a resolution.
It rejected Foxconn’s allegation of a breach of its agreement, saying the claim was based on a delisting notice Nasdaq had sent the Ohio-based automaker. Lordstown said last month the notice had no immediate impact on its stock listing and it had until Oct. 16 to regain compliance with Nasdaq’s rules.
“Foxconn’s actions are completely unwarranted. Their course of conduct has resulted in material — and what is becoming irreparable — harm to the company,” Lordstown said in a statement.
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