Workhorse Sold Most Of Stake In Lordstown This Summer

Workhorse (WKHS) said in a filing on Monday that the company sold down much of its stake in Lordstown Motor (RIDE) this summer. The electric delivery truck maker sold 11.9M shares in the startup since July 1, reducing the company's 9% stake by about three quarters.

LORDSTOWN STAKE: According to a regulatory filing, "During the period beginning July 1, 2021, through August 6, 2021, [Workhorse] sold approximately 11.9 million shares of [Lordstown] Class A Common Stock at an average price of $6.67 per share for expected net proceeds, after transaction expenses and brokers’ commissions, of approximately $78.8 million. As a result of the sales, the company recorded a loss of approximately $52.1 million." Workhorse was an early investor in Lordstown Motors.

RESULTS: Workhorse Group also reported on Monday second-quarter revenue of $1.2M, with consensus at $6.41M, and net loss of $43.6M versus $131.3M last year. The company said that "Our initial production run of the C-1000 has confirmed the excitement around that product, which we have shown to existing customers and dealers and are beginning to deliver in limited quantities. What is clear from the initial customer feedback is that we need to further increase the payload capacity of our vehicles. While we revise the design the vehicle, we believe we can continue with a limited level of production for customers where our current payload is adequate or those who want to road test one of the few, if not only vehicles in our market that are available to them now."

WHAT'S NOTABLE: Lordstown has been in the spotlight recently amid federal investigations into its business practices and the exit of CEO Steve Burns. Last month, the company confirmed receipt of SEC subpoenas, saying that "The company has also received two subpoenas from the SEC for the production of documents and information, including relating to the merger between DiamondPeak and Legacy Lordstown and pre-orders of vehicles, and the company has been informed by the U.S. Attorney's Office for the Southern District of New York that it is investigating these matters. The company has cooperated, and will continue to cooperate, with these and any other regulatory or governmental investigations and inquiries."

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Adam Reynolds 1 month ago Member's comment

I don't like either of these stocks. Far better investment options out there.