Lordstown Motors, the struggling electric vehicle startup, is facing scrutiny after several of its top executives sold off millions of dollars in stock ahead of the company's first quarterly earnings report in March.
Five executives at Lordstown Motors collectively sold stock worth $8mn in February, regulatory filings show. The sales were first reported by The Wall Street Journal.
As filings show, Lordstown executives netted millions of dollars even as their company hadn't delivered a single vehicle
The timing of the transaction, a month before the company's earnings release, is uncommon. Many businesses prohibit CEOs from selling shares for a period of time prior to their financial reports. In March, Hindenburg Research accused the firm of deceiving investors by making false promises about preorders. Hindenburg, which reported a short position in Lordstown, referred to the company's order book as a "mirage."
According to the documents, President Rich Schmidt, a former Tesla executive who joined Lordstown in 2019, sold almost half, or 39 percent, of his vested ownership in the business on Feb. 2 and Feb. 3 for $4.6 million.
Schmidt used part of the earnings from Lordstown, which went public in October, to expand his turkey-hunting property in Tennessee, according to a spokeswoman for the company.
Lordstown's CEO and CFO resigned shortly after the warning was issued. Despite great promises last year that led to investors showering it with $675 million in cash to begin commercial production, it appears that the electric car firm is struggling a lot.